One aspect of majority Governments that is not often discussed is the ability to control timing. As an example of this announcements that may not be received positively are often released late on a Friday, as was the case when the Liberals released alarming updated debt projections on Friday, December 23rd of last year. Another example is making an announcement during the same time frame the budget is introduced knowing full well the budget will overshadow other events and thus receive less scrutiny. An example of this occurred recently when the Liberal Government released a document they call the “Modernizing Parliament” document.
As an Opposition MP I have come to be increasingly skeptical when the Liberals introduce new documents using buzz words, as was the case with the Liberals “Democratic reform” that the Liberals reneged on only when their preferred version of democratic reform, the use of a ranked ballot, was not well supported by experts during a Parliamentary Committee study and submissions by Canadians who instead supported other proposals like proportional representation.
In this case of “Modernizing Parliament,” it is clear that the Liberals see less accountability and a shorter Parliamentary work week – both measures that benefit the majority governing Liberals, as the more modern new way of doing business. Essentially some of the measures being proposed include shortening the Parliamentary work week by eliminating Friday sittings, eliminating Opposition procedural tactics in the House of Commons and what I find most troublesome allowing the Prime Minister to only show up one day a week in Question Period.
Why does this last measure trouble me? Think back to what was viewed as the “Senator Duffy scandal” – without the ability to question the Prime Minister daily in the House of Commons it is doubtful this issue would have received the scrutiny it deserved. Conversely without the ability to question the Prime Minister daily would the talents of NDP leader Thomas Mulcair in Question Period have been as well recognized by Canadians? Having been a member of the former 41st Parliament I believe our democratic interest was well served with the daily accountability from Question Period with an expectation the Prime Minister attends more than once a week.
At the same time the Liberals are proposing to spend less time in Ottawa they have also increased Parliamentary precinct spending by 18% since being elected. The House of Commons and Senate budget jointly is almost $700 million annually, an increase of roughly $100 Million since the Liberals were elected. In my view significantly increasing spending at the same time the Liberals are proposing to spend less time in Ottawa is misguided.
More importantly is the fact that as elected Members of Parliament we do not work for the Liberal Government, we work for Canadians. You are our employers and in my view it is up to Canadians to decide if they see higher spending on Parliament and getting a shorter work week in return is something you support. For the record both the Conservative and NDP Opposition caucuses fully oppose these measures. We were elected to a House of Commons that sits 5 days a week when the House is in session. I believe it is our duty as MPs to honour that work week commitment no differently than most Canadians do.
My question this week is do you support a shorter Parliamentary work week when the House of Commons is sitting? I can be reached at Dan.Albas@parl.gc.ca or call toll free 1-800-665-8711.
Budget 2017: No Balance In Sight
This week the major talk in Ottawa revolves around the Liberal Government announcing the 2017 Budget document. This is typically the time where Government promotes what it believes are the benefits of said budget and opposition generally looks to point out those items they view as missing or otherwise lacking. For this week’s report I will pass on some of my own observations and thoughts from my perspective of the official opposition deputy finance critic.
My first observation was how inaccurate many of the advance rumours on this budget turned out to be. As an example while many expected the Liberals to honour a promise to phase out taxation benefits with stock options and capital gains none were targeted in this budget. Likewise another rumour that many airports located on federally owned lands would be sold is also off the table, at least for the moment.
The most frequently asked question on budget day is typically what taxes are being increased or decreased. In this case the changes in this budget are mostly tax increases in specific areas.
Some of those areas include a tax increase on alcohol and tobacco products, ride sharing services such as Uber are now taxable, and curiously the elimination of the transit tax credit for those who frequently use public transportation. Income taxes remain unchanged after being altered in the 2016 budget.
Although the Liberals promised to balance the budget in 2019 the fiscal update contained in Budget 2017 reveals that in reality the Liberals plan to run a deficit over $23 billion in 2019 with no plan to return to a balanced budget in the foreseeable future.
By the numbers Budget 2017 proposes a total budget deficit of $28.5 billion with a $ 3 billion risk buffer. If the risk buffer is removed the actual deficit would be around $25 billion. For added context the 2016 budget deficit is estimated at $23 billion so in that respect spending has increased by roughly $2 Billion.
Where is the increased spending going? The Liberals are using a different strategy in Budget 2017. Rather than spend relatively large amounts of funds in specific areas, such as infrastructure as an example, the Liberals are giving relatively small amounts of funding spread out over a much wider range of areas, far too many to include in this report. Some critics have already suggested this will result in these funds having little impact being spread too thin. From my standpoint while it would be easy to suggest this budget is trying to do too many things I believe taking a wait and see approach is prudent.
Overall my largest concern with this budget is the failure to indicate when the Liberals will return to a balanced budget. By the time the next election occurs the Liberals will have added over $100 Billion in new debt with literally no end in sight. While the Liberals argue this is investing in the middle class in my view it is mortgaging the middle class as future generations of Canadians will be left paying for what is basically a structural deficit.
As always I welcome your questions and comments on Budget 2017 and any matter before the House of Commons. I can be reached at Dan.Albas@parl.gc.ca or toll free at 1-800-665-8711.
The Upcoming Federal Budget
This week the House of Commons is adjourned and will resume next week with the much anticipated budget to be delivered on Wednesday, March 22, 2017. As is often the case there are considerable rumors circulating on the content of the budget. At this point the only details we know with certainty is the budget will again run a considerable deficit while the Liberal Government refuses to disclose when the budget will again return to balance, given that the promised date of 2019 will not be met.
For the Liberals, they have created a very serious problem. Increases in program spending along with a cut to income taxes in particular for those in the $100,000 up to $199,000 threshold have essentially created a structural deficit where spending now exceeds revenue each year by a sizable margin. To further complicate this situation, as I mentioned in last week’s report, in the year 2019 Liberals will also significantly increase infrastructure spending according to their fiscal plan. All of this means that in essence the Government is now out of money and is borrowing creating a situation where increasingly more money is spent paying interest on debt leaving less money available for other programs. In fact Canada now spend more on debt servicing each year than we do on National Defence. As you may also be aware Canada has recently been singled out for not fulfilling our NATO budgetary spending commitments.
For the Liberal Government who inherited a balanced budget, the sudden change in Canada’s fiscal situation has created a serious problem. With spending only set to increase, the only alternative for the Government is to increase taxes. This was recently contemplated with the idea to make employer provided health and dental plans to be considered as taxable benefits before the Government backed off on the idea. Currently the Government is now exploring other options where taxes can be increased without causing harm to the Canadian economy. I mention this fact as the new administration in the United States is currently in the process of lowering many taxes in particular for the corporate sector. Although the USA Presidential twitter feed seems to attract most of the media attention these days lower USA corporate taxes are a real concern for Canadian competitiveness. As one example Canadian business investment declined over 2% in the most recent fiscal quarter and has declined every fiscal quarter since the Liberal Government was elected.
The decline in investment is a particular concern as new investment typically leads to more jobs and by extension citizens who are employed and paying taxes instead of being unemployed and drawing benefits. The solution? The Liberal Government has hinted they will undertake a taxation review that many have speculated will be an exercise to eliminate various tax credits in an effort to increase revenue. It has also been suggested the Government may increase the capital gains tax. In theory most support an increased capital gains tax however the downside of such a move is a term called “asset lock” where assets are not sold in order to avoid paying taxes on the capital gains. Having assets on hold does little to stimulate the economy and likewise does not produce the revenue expectations of government thus creating a no win situation.
In my opinion the Government will need to concede that it has developed a spending problem and as generation we are currently leaving bills behind for our kids and our grand kids to resolve, a situation most I believe would agree is not responsible.
My question today relates to the budget. Do you believe the Government should place a greater priority on having a plan to return to balance? I can be reached at email@example.com or you call toll free at 1-800-665-8711.
Where Is This Money All Going?
Back in late December the Liberal Government quietly released a rather ominous report from the Department of Finance that related to future debt projections based on the Liberal Governments current fiscal policy direction. The report indicated that unless there is a change in course Canada will continue to see annual deficit budgets until at least the year 2050. By that time Canada’s debt will have reached a rather staggering level of $ 1.55 trillion dollars. This of course stands in stark contrast to the return to a balanced budget in 2019 promise made by the Liberals prior to the last election. It is no wonder that the Liberals, it has since been reported, delayed releasing this report until Friday December 23rd instead of early October when it was first shown to the Finance Minister.
With so much newly created Liberal debt the question to be asked is where is this money all going? The Liberals will continually reference one of the areas of increased spending is infrastructure. In the past the former Conservative Government also significantly increased spending on infrastructure and in reality all levels of Government engage in infrastructure spending. With that in mind for this week’s report I would like to share more information regarding the Federal Government infrastructure spending as it will be current and increasingly future generations of Canadians who will be paying for it.
Currently the Government has announced $ 186.7 Billion in planned infrastructure spending. However on closer inspection that $ 186.7 Billion is being spent over the next twelve years. Roughly $ 100 Billion was already allocated for as regular infrastructure spending while the Liberals have called for a further $82 Billion increase of “new money” to raise that amount to reach the $186.7 Billion figure. What is more interesting is that only $13.6 Billion of that $ 186.7 billion will be spent over the next two years Canada wide. This is an important figure because for the first eight months of 2016 the Liberals ran a budget deficit of $ 12.7 billion and are estimated to hit a deficit over $ 25 Billion this year alone. In other words infrastructure spending is in large part not to be blamed for the Liberal Government massively increasing deficits and growing debt.
From another perspective when looking at the $ 12.7 Billion that is forecast to be spent on Infrastructure between 2016 and through to 2018 currently the Parliamentary Budget officer could only identify $ 4.6 Billion in actual projects meaning that as much as debt continues to increase many of the announced infrastructure dollars have yet to make it out to communities where they can provide economic and societal benefit.
From a political perspective the timing is very interesting. While the Liberals have announced a significant $ 186.7 Billion of spending on infrastructure and continue to cite increased infrastructure spending when queried on significantly increasing debt, in reality very little of the announced infrastructure spending will have occurred by 2018, in theory just $ 12.7 Billion. More troubling is that of that $ 12.7 Billion, much of that has yet to be allocated. This means that by 2019, which just so happens to be an election year, The Liberals will need to significantly accelerate their infrastructure spending which has not, to date, kept pace with how fast the same Liberal Government has been accelerating deficit budgets and increased debt.
As the Deputy Finance Critic the fact that the current rise in debt and deficits is clearly un-related to increased spending on infrastructure is a serious concern. Basically this situation means that current program spending is unsustainable and is potentially creating a structural deficit that will present serious challenges for future generations of Canadians. My question for this week is how concerned are you at the lack of progress on getting infrastructure projects going contrasted against the growth in deficit budgets and debt? I can be reached at Dan.Albas@parl.gc.ca or call toll free 1-800-665-8711
One of the frustrations I experienced in the last Parliament as a member on the Government side of the House was how certain Government bills and related legislation were at times intentionally mispresented by interest groups and others solely to incite opposition. As an example of this it was often implied that Bill C-51 “The Anti-Terrorism Act, 2015” would allow for peaceful law-abiding protesters to be arrested without cause at a protest or demonstration. These claims were erroneously made despite the fact the Bill contained language that clearly stated Bill C-51 specifically excluded “lawful advocacy or protest” from its application in defining legal and illegal protests with respect to “interference with critical infrastructure”.
When I became a member of the Official Opposition one of the commitments I made was to not use similar tactics that in my view only serve to mislead Canadians. I offer these comments as recently I have noted that a Bill introduced by the Liberal Government, specifically Bill C-23 “The Preclearance Act” is being targeted with many similar misleading and inaccurate claims much as was targeted at Bill C-51.
If you are unfamiliar with Bill C-23, in the words of the Liberal Government, it will expand the limited number of current US Customs staffed pre-clearance locations in Canada (as an example in airports such as Vancouver and Calgary for USA bound passengers) to a greater number of locations in Canada (that because of Bill C-23) will expand to include passage by land, water and train.
Some are claiming that Bill C-23 allows US Customs Agents to engage in activities that are against Canadian law while on Canadian soil. While these allegations have been successful in stirring up concern and opposition to the Preclearance Bill, the actual legislative summary is clear on this point and I quote accordingly “establishes that the exercise of any power and performance of any duty or function by a United States preclearance officer is subject to Canadian law, including the Canadian Charter of Rights and Freedoms, the Canadian Bill of Rights and the Canadian Human Rights Act”.
From another perspective, it has been suggested that entering the United States may be more difficult for some Canadian citizens as a result of the new administration. While I have not yet personally heard from any constituents to verify these claims I will observe that if a Canadian citizen is going to be refused entry into the United States for whatever reason it is far more convenient for that refusal to occur in Canada at a pre-clearance location rather than in the United States where a deportation and related unplanned air travel costs can present a far more serious inconvenience. For that reason alone I believe the Liberal Government is taking a prudent course of action in expanding the pre-clearance program that by most accounts has proven to be a simpler, more accessible way to travel across the border for those citizens who decide to visit to the United States.
I welcome your views on this subject: are you supportive of expanding USA pre-clearance as described above in Canada? I can be reached at Dan.Albas@parl.gc.ca or toll free 1-800-665-8711.
Subscribe to the MP Report
Sign up now to get Dan's weekly MP report emailed directly to you!
Sign up now to get a monthly MP Report mailed directly to your home.
Dan Albas is the Member of Parliament for the riding of Central Okanagan-Similkameen-Nicola.
Central Okanagan – Similkameen – Nicola