The Blueprint: Canada's Conservative Podcast - The Affordability Crisis

00:00:00.000 Hello and welcome once again to the Blueprints. This is Canada's Conservative Podcast. I'm

00:00:06.700 your host, Jamie Schmael, Member of Parliament for Halliburton, for the likes of Brock with

00:00:10.120 new content for you every single Tuesday, 1.30pm Eastern Time. We do appreciate you

00:00:14.700 joining us here. And with this great content, we ask that you like, comment, subscribe,

00:00:18.640 share this program together. We can push back against that ever moving liberal agenda. And

00:00:23.100 there is lots to talk about. There's lots going on in the Ukraine, lots going on in

00:00:27.640 in the world in general. But we are going to focus today on domestic issues, specifically

00:00:33.580 the inflation crisis, housing crisis. We talk about supply chain issues and the list goes on. So to

00:00:40.460 come and talk to you about it, we have Adam Chambers, a Member of Parliament for Simcoe North. He's also

00:00:45.680 the member of the Standing Committee on Finance and the Deputy Critic for Finance. We do appreciate

00:00:52.140 your time. Thank you so much for joining us. Great to be here, Jamie. And this is week two of a two

00:00:57.600 week constituency break, I guess, if you call us on necessarily break, but we're in our

00:01:02.740 writings. And so this is why, Adam, you don't get to sit in the in the in the fancy studio

00:01:07.880 we have built. And fortunately, that's that's Ottawa only. So as much as I love Ottawa, it's

00:01:14.140 really nice to be home for an extended period of time and to be meeting with people and hearing

00:01:18.760 about their issues. Well, I'm sure you're hearing a lot about the price of a liter of gasoline

00:01:23.340 right now in Vancouver Island. It's well over $2. It's approaching that here at Ontario. We're

00:01:29.660 reset. And of course, our boundaries are neighbors. We're right up against each other. What are you

00:01:34.980 are you hearing that a lot? Because I know I am. I mean, look, I don't like to brag about the

00:01:39.580 expensive places that I go to, but I did fill my car up with gas yesterday. And, you know, it was $2

00:01:45.200 and just over $2 a liter. It's supposed to, we expect it's going to come down a little bit. But

00:01:51.420 I mean, after running up about 40, 50% in a short period of time, it is all that people want to talk

00:01:58.320 about because every time they go to fill up their car, it just kind of smacks you right in the face

00:02:02.220 of how much we're paying per liter of gas. And of course, we have a planned increase to the carbon

00:02:08.760 tax coming on April 1st. And so people are already talking about, well, how much is that going to

00:02:13.380 add per liter of gas? So all total after April 1st, we'll be looking at about, I think, 11 cents

00:02:19.300 total per liter on carbon tax added to gasoline. We're already about 9 cents on there now.

00:02:28.380 Yeah, that is just incredible how much is already taxed on the price of a liter of gasoline. So when

00:02:34.340 you compound this with a housing crisis, the affordability crisis, the price of groceries now

00:02:40.080 are absolutely off the charts. And now we have this issue with our fuel prices, which of course

00:02:48.320 will add on more costs to everything, but anything that it needs to be transported by, used by

00:02:52.840 fossil fuels, that will be compounded into the price. So what this does, I guess you can go into

00:03:00.000 this more, I'm sure you will, but this is discretionary spending that gets eaten into,

00:03:06.360 right? You pay your bills first and then whatever else you have, you can kind of, if you have anything

00:03:11.300 left, you're able to maybe go to the movies and grab a meal out. But when that's getting eaten by

00:03:17.600 the increased price of fuel, groceries, et cetera, there's not much left.

00:03:21.440 Well, you're exactly right. Every penny that gas goes up in Canada takes about $29 million

00:03:29.840 out of the pockets of Canadians generally. So that's $29 million that Canadians discretionary

00:03:37.440 spending that could go to other items, you know, food, entertainment, you know, out for a restaurant,

00:03:43.600 et cetera, you know, buying clothes for your kids. So every, really every penny takes money out of the

00:03:51.360 economy and redirects it somewhere else. And, you know, people are feeling the pinch everywhere.

00:03:56.560 You mentioned, you know, that price increase being felt everywhere. You look at the price of diesel,

00:04:02.640 you know, goods get to market in this country on trucks, they use diesel. So when diesel is up over

00:04:09.040 $2 a liter, we are going to continue to feel that pressure. And the Bank of Canada just this week,

00:04:16.240 you know, just last week raised interest rates for the first time. And they've said they're going to

00:04:21.120 keep raising interest rates because they don't see an end to inflation anytime soon. You know,

00:04:26.560 a year ago, this is the central bank and even the government said this is temporary,

00:04:31.600 what they call transitory inflation, but it's a year later and it's still here and there's no end in

00:04:36.800 sight. What are we going to do about it? I mean, we need to continue to pressure the government to

00:04:42.080 reduce its spending to take its foot off the gas. Almost every major bank economist and all

00:04:49.600 reasonable economists are now warning the government, you know, they shouldn't be spending as much

00:04:54.880 at this point in the business cycle. Inflation is super high. Growth in the economy is doing relatively

00:05:02.160 well. So now is not the time to continue to spending. It's only going to have an upward

00:05:06.720 pressure on inflation. Well, we had said that six years prior to the pandemic happening,

00:05:12.480 when we told the government, you should be paying your bills or you should be saving

00:05:16.400 for that rainy day. And we were told that rainy day was never going to come. And of course,

00:05:20.560 incomes comes the pandemic and up goes the spending and the creation of all this extra currency out in

00:05:27.120 the atmosphere. So what we're just talking about, the disappearance of discretionary spending,

00:05:35.600 that in many cases, often, I think in almost every case, that then slows the economy in turn because

00:05:42.960 people don't have that money to go out for dinner or have the extras, right? Like go for a nice evening

00:05:49.200 out or even a vacation for crying out loud. That just contracts everything because we see that shortage of

00:05:56.400 spending, the people struggling even more. That's right. Now, we can probably handle small,

00:06:03.040 minor increases for short periods of time. But when you have economists and the Bank of Canada

00:06:09.200 warning that some of these increased and elevated pressures are going to be around for a while,

00:06:13.440 then people will make different spending decisions. And it will mean that they might not

00:06:18.320 go on that vacation, or as you say, might not go out for that dinner. I mean, it wasn't that long

00:06:24.320 ago that that gas was actually around a dollar a litre. You're talking about 100% increase in,

00:06:31.440 you know, 16, 18 months, or less than that. And hard for some businesses to plan, you know,

00:06:38.000 if they have an input cost that is heavily dependent on fuel, or if you're a trades person,

00:06:43.440 and you, you know, live in one of our ridings, it's a fairly large area, and you service, you know,

00:06:47.840 you might have to drive 40 minutes to a job site one way, and you might go there twice a day. I mean,

00:06:52.720 you're talking about a significant increase in your costs. And it's not like you can turn around and

00:06:58.160 just, you know, pass all those through the consumer, because most people are feeling pretty stretched,

00:07:02.480 no matter, you know, no matter where it's coming at them grocery store, or, you know, some,

00:07:08.160 some restaurants are having to look at their prices as well, because the food prices are going

00:07:12.000 up significantly. So once you start to see some of these increases, you know, persist, then you'll

00:07:19.920 also see wages go up. And once wages go up, in certain, or in all cases, they don't really come back

00:07:26.160 down. So once a wage goes up, that's a permanent increase. So then a business has to then, you know,

00:07:30.640 change its cost structure and what it charges its customers based on, you know, based on that

00:07:36.640 business's cost structure. So we could be seeing some elevated prices for a little while.

00:07:40.080 Let's focus on the energy issue. You saw in the United States, it's really, I can't even believe

00:07:47.280 this is happening. So 13 or so months ago, Joe Biden is sworn into office as the president of

00:07:52.480 the United States immediately canceled the Keystone XL pipeline that would have brought Alberta energy

00:07:58.560 down to the United States. He then lifts sanctions on the Nord Stream 2 pipeline, which allowed the

00:08:05.440 completion of Russian energy into Germany bypassing Ukraine totally. The sanctions are now back on the

00:08:12.640 Nord Stream 2 pipeline because of the situation in Ukraine. But yet the, the issue with the United

00:08:19.520 States is because they were importing Russian energy, they needed to fill that gap because demand

00:08:24.720 is still there. You need to work on the supply side. So then they start talking to Venezuela. They're

00:08:29.920 talking to the Saudis. They're talking to Iran. The neighbor with huge oil reserves is just right 0.94

00:08:37.120 above them. Supposedly our best friend. What the heck is going on? You have to wonder,

00:08:43.920 all of this that we are talking about or told about at least the strong working relationship between this

00:08:49.120 government and the Biden administration. You know, canceling the Keystone pipeline was the first executive

00:08:54.240 order that President Biden signed. They are now banking Venezuela, Saudi Arabia, other OPEC countries to

00:09:02.800 release more reserves. You know, we have an opportunity to think about energy security for,

00:09:09.680 for North America. Keystone represents an opportunity to increase the amount of supply that we can actually

00:09:17.760 get down into the United States where it's so desperately needed. You know, they're also seeing

00:09:24.240 increasing energy costs for oil. We have the opportunity to, you know, as I say, create an energy

00:09:32.320 secure market in North America. And by the way, our environmental, you know, responsibility of our

00:09:42.320 oil and gas companies have a much greater environmental record than they do in some of these other countries

00:09:46.880 that we're talking about across the world. So if we can displace Russian oil or, say, Russian natural

00:09:55.440 gas, it's, it's actually far better for not just Canada, but for the world in terms of, you know,

00:10:02.880 better humanitarian conditions in Canada, better environmental track record with the companies

00:10:08.320 that operate here. And so I would expect or hope that the Trudeau administration, Prime Minister

00:10:15.360 Trudeau is impressing upon his American neighbors about the benefits of clean oil, ethical oil from

00:10:23.920 Canada to serve their needs. Well, that's the other thing too. Even if we wanted to supply

00:10:30.160 Europe with energy, we have, we don't have the ability to do so. The Energy East pipeline to name

00:10:35.440 one of many that were cancelled would have brought energy from Alberta to, to New Brunswick, which would

00:10:41.040 have been able to supply the European markets. So Europe in large part is dependent on Russia for

00:10:46.640 a lot of their energy. And so good neighbors, good friends, like, like Canada can't even come to their

00:10:53.360 rescue because we have handcuffed ourselves so much in this country that we can't get pipelines built.

00:10:58.640 Well, that's shame on us. We had the opportunity a number of years ago, there was 14 LNG facilities.

00:11:06.080 If you just want to talk about natural gas for a second, a number of years ago, there was 14 LNG

00:11:11.120 proposals for liquefied natural gas to get that to broader global markets. I believe now there's one,

00:11:19.120 one proposal that, that might, might get built. That's a failure on, on, on us on as, as a country,

00:11:28.800 but you know, our leadership in terms of seeing the opportunities, there were people warning about

00:11:34.320 Europe's Russia dependence on Russia for natural gas for at least the last decade and maybe longer.

00:11:40.960 So it's not like this just snuck up on us. We do have an opportunity to serve that European market.

00:11:47.520 Now we can't displace all of Russia's natural gases. You know, it does supply an incredible amount of

00:11:54.000 natural gas into Europe, but we can display some of it. And, you know, with our allies, with, you know,

00:12:01.120 those countries that are wanting to wean themselves off of, uh, Russian energy dependency, look at Latvia

00:12:08.000 just last week, Latvia asked for more Canadian natural gas. So what are we doing, uh, to help that ally

00:12:17.040 when we have an abundance of that resource here? It would be great for everybody involved

00:12:22.080 and a win, win, win. And it's by the way, better for the environment. Canadian natural gas is being

00:12:27.040 produced at a much better, uh, environmental record than the gas that's coming out of Russia.

00:12:33.840 Well, you also hear a lot of people talking right now about now's the time to, to invest in green

00:12:38.880 technology, which is fine. I think we all support green technology. We all had environmental plan.

00:12:44.160 I think the point that seems to be missing is when, when the left talks about that,

00:12:48.400 they talk about it in a concept that you must subtract from the oil and gas industry only to

00:12:54.800 add green energy. But where is the timeline from when green energy is going to be widely available

00:13:01.360 and affordable to the vast majority of Canadians? They never answer that timeline. What is going to

00:13:06.640 happen in the middle? So you shut down oil and gas, what are people going to use to heat

00:13:11.360 their homes or fuel their cars or et cetera, et cetera? What are we going to do to fill that

00:13:16.400 until we get to the point that green energy is ready?

00:13:20.160 Even the smartest individuals who are promoting, uh, you know, shifting into this new green, uh, 0.91

00:13:28.560 industry or, or green environment and green energy all admit that not only is there a transition,

00:13:37.200 but we will never take the use of oil, petroleum products, and natural gas down to zero in the world.

00:13:44.640 So the question really needs to become then what does it look like to supply the energy that we

00:13:48.800 need and how much can we do for green energy and what will we need to do to rely on some of the

00:13:54.960 carbon fuels? And yes, we can try to get to net zero where we can do some of the carbon capture and

00:13:59.280 storage and kind of shifting that mix, but we will always, like there will always be a need for, uh,

00:14:06.160 some carbon emitting fuels. Natural gas happens to be actually, as far as carbon emittings go,

00:14:12.480 uh, comparable to other fuels, uh, a much lower carbon footprint than some of the other, uh,

00:14:19.600 options. You know, you'll get the coal use or propane use, uh, natural gas actually is much

00:14:25.520 better. So if we can displace the world's use of coal with natural gas, we're far better off.

00:14:30.720 Who has a lot of natural gas? Canada. It's like adding to your portfolio. You don't have to

00:14:36.640 subtract, you can add. Exactly. That's exactly right. And we need to be thinking about how to

00:14:42.320 promote our energy as a clean source, um, responsible and ethical energy for the world.

00:14:49.680 You know, Canada can be an, an economic energy superpower. By the way, we export a heck of a

00:14:55.200 lot of hydroelectric power in North America. That is all clean, you know, that's all clean power.

00:15:02.000 And we should be very, uh, happy about that and promoting Canada as a clean energy superpower.

00:15:09.920 I want to bounce quickly back to, to housing because you did touch on it earlier and I

00:15:13.760 really didn't jump on it, which I should have. Uh, and then we got to close out the show. We're

00:15:17.440 running out of time, but, uh, let's talk about housing. You might talk about, uh, interest rates,

00:15:22.160 getting a bit of a bump, uh, I guess a week or so ago now. Um, how's the, how do you see this

00:15:27.440 playing out? Are you going to see prices? Do you think it's continuing to stay high? You're going

00:15:31.680 to, do you think it's going to come down a bit? How does this mean for people who have already

00:15:36.240 bought houses at high prices? What, how do you see this playing out? It's, it's hard to tell.

00:15:41.120 I mean, the bank's been very clear. The bank of Canada has been very clear. There will be more

00:15:45.440 interest rate hikes coming. So you might see some people rushing to get into the market before that

00:15:51.920 happens and to refinance and to, you know, walk in an interest rate before rates start to move up.

00:15:56.560 Although they all have, all have ready started to move, uh, hard to predict where house prices go

00:16:03.120 in Canada. I've been wrong for the last decade. So I won't get into that here, but you know,

00:16:08.640 people can expect to pay more per month for mortgage as boring weights, uh, boring rates go up. Uh,

00:16:16.080 hopefully it reduces some of the activity. I mean, just, it's been, you know, you got whiplash

00:16:21.440 looking at the, uh, charts of house prices across, across Canada in particular in parts of, uh,

00:16:27.840 central Ontario that are close to, uh, close to the GTA, including my markets, I'm sure yours as well.

00:16:33.600 So it's an issue people are continually concerned about. It is not sustainable. You can't have prices

00:16:39.040 go up 20, 30% a year for two, three, four years in a row and not expect that that's going to, you know,

00:16:45.600 affect, uh, affect the economy. You talked about, uh, you know, taking money out of the economy,

00:16:50.720 paying a higher fuel prices. Well, if you have to pay an extra 200, 300, $400 a month

00:16:55.680 because interest rates go up, well, where's that money coming from? That's also money that's not

00:16:59.680 going to spend on some of those other items, discretionary spending. So, you know, we should

00:17:05.200 all care about the cost of, uh, cost of borrowing and interest rates, but you know what, we need to get

00:17:10.800 inflation under control. There's no question about it. We've got to do that work and it might be a

00:17:14.800 little bit of pain, uh, but we need to make sure that inflation stays, uh, stays low and comes back

00:17:20.320 down to a more comfortable level. Absolutely. 1.2 trillion in debt and hopefully a federal budget

00:17:27.440 at some point soon. Um, look, as you know, we always give the guests the last word. So I will turn

00:17:33.040 the, turn the floor over to you. Well, the federal budget is coming soon. What are we looking for? We want

00:17:38.640 a plan to reduce the amount of deficits that this government has been spending. The parliamentary

00:17:44.720 budget offer said, as interest officers said, as interest rates are going up, the federal government

00:17:50.240 can expect to spend up upwards now $40 billion a year on interest. So we need to get our spending

00:17:57.120 under control so that we can spend on the priorities that all Canadians enjoy. That's what I'm looking for

00:18:02.240 in the budget. We need to, uh, get back to a more sustainable fiscal plan and some growth.

00:18:08.640 Can't agree with you more. Adam Chambers, member of parliament for Simcoe North.

00:18:11.840 Do appreciate your time. Also a member of the standing committee on finance and the deputy

00:18:15.680 critic for finances, busy individual. We do appreciate him taking time out of the schedule

00:18:20.400 to talk about this very concerning issue. And we do appreciate you for tuning in.

00:18:24.480 Don't forget. We have new content every single Tuesday, 1 30 PM Eastern time.

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00:18:41.920 as prime minister of this country. Thank you so much for joining us. Remember low taxes,

00:18:46.160 less government, more freedom. That's the movement.

The Blueprint: Canada's Conservative Podcast - March 15, 2022

The Affordability Crisis

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