QUESTION PERIOD — Finance
Report of Parliamentary Budget Officer
June 21, 2021
Honourable senators, my second question is for the government leader as well.
Last month, leader, the Parliamentary Budget Officer warned once again that the lion’s share of the Trudeau government’s $100 billion in so-called stimulus spending is going to come too late to do any good. In fact, the PBO projected this poorly calibrated spending of $100 billion in borrowed money will bump up inflation this year, next year and in 2023. The PBO says this will result in an increase in the Bank of Canada policy rate of 50 basis points in order to keep inflation in check, which will then “. . . directly increase public debt charges as existing debt is refinanced and future borrowing requirements are financed at higher rates. . . .”
Leader, is your government aware of the PBO’s warning that the so-called stimulus is going to do more harm than good? Are you reconsidering this ill-thought-out plan?
The government is certainly aware of the PBO report and it takes seriously its observations. The government remains of the view that the measures that were announced — and to which you refer — will benefit the economy, help us get through this period in a stronger way and is keeping a careful, watchful eye, of course, on all indicia of our economy, including inflation.
Given the government’s track record, I would be betting on the PBO over this government 9 out of 10 times for sure, maybe 10.
Leader, inflation rose to 3.6% in May, its highest point in more than a decade. The Angus Reid Institute reports that 9 in 10 Canadians say that over the past six months, it has become more expensive for them to improve their home through renovations, purchase a new home, fill up their tank with gas and buy groceries for their households.
Leader, why is your government insisting on borrowing $100 billion to stimulate an economy that won’t need to be stimulated, driving up interest rates by half a percentage point, increasing costs for every Canadian and escalating our public debt charges in the process?
The government remains of the view that the measures it has introduced and announced will serve Canadians well and is keeping a careful and prudent watch on the economy. Time will tell.
In that regard, I cannot resist reminding this chamber of the nature of the questions that I had been receiving for months and months about the terrible and disastrous approach that Canada has taken to procure vaccines. I don’t hear those questions anymore because, as I have been saying for many months in the past, the government remains committed to its plan and is confident that it will meet or, indeed, exceed its targets.
Again, when we reconvene in this chamber in the months to come, I will have occasion to see whether or not the prudent stewardship of our economy through these difficult times will continue to hold.
