Honourable senators, I rise to speak to Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023. Before I begin, I would like to thank Senator Moncion for her speech last week.

Honourable senators, Bill C-59 is an omnibus bill. That means it is a bill that includes many measures affecting many subjects. It includes many amendments to existing legislation, including the Income Tax Act, the Excise Tax Act, the Bank Act, the Trust and Loan Companies Act, the Insurance Companies Act, the Canadian Payments Act, the Bankruptcy and Insolvency Act, and the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, as well as many other acts.

Bill C-59 also proposes to enact new legislation, including the digital services tax act, the Canada water agency act and the department of housing, infrastructure and communities act, all of which should be established under their own legislation to provide for thorough parliamentary debate.

Honourable senators, in its 2015 election platform, this government put forward as “A New Plan for a Strong Middle Class” a promise to end omnibus bills, calling it an undemocratic process that prevented Parliament from properly reviewing and debating government legislation. Fast forward to 2024, and we can now see numerous omnibus bills put forward by this government over the past nine years.

Bill C-59 will enact certain provisions of the Fall Economic Statement which was tabled on November 21 of last year. It was referred to the Standing Senate Committee on National Finance on February 8 for pre-study. Many omnibus bills are split, and different sections are referred to different Senate committees for study, such as Bill C-69. However, this 546-page bill was referred solely to our National Finance Committee for study.

In February, the Senate approved a motion by Senator Tannas that the Standing Senate Committee on National Finance be authorized to examine and report on the practice of including non-financial matters in bills implementing provisions of budgets and economic statements. Although the stated intention of the motion is not to do away with omnibus bills, change the supply process or change our Rules, I maintain that both omnibus bills and the supply process do, indeed, need to change.

Since Bill C-59 implements certain provisions of the Fall Economic Statement, the bill cannot be studied in isolation of the statement. The statement is 130 pages long. It provides an economic and fiscal overview, disclosing details of economic and fiscal projections over a five-year period to fiscal year 2026-27. It outlines new initiatives with some details, including the estimated costs of those initiatives. The statement also provides updates to major government initiatives that have already commenced, such as the Housing Accelerator Fund, the Canada-wide Early Learning and Child Care Plan and the additional funding of our universal health care system. The Fall Economic Statement also updates the government’s Debt Management Strategy and provides a statement on gender diversity and inclusion.

As a background to Bill C-59, the Fall Economic Statement also provides a list of legislative changes required to implement the Fall Economic Statement, along with information on personal income tax measures, business income tax measures and sales and excise tax measures, which are included in the bill.

One of the most significant problems with the Fall Economic Statement is the inconsistency of the dollar estimates provided in the fiscal projections. The fiscal projections are the most important aspect of the Fall Economic Statement, as they indicate the government’s financial projections, including estimated revenues, expenses and deficits for each of the seven years beginning with 2022-23. Because this information is provided in each budget and fall economic statement, readers can track how reliable the government’s projections are. The estimates provided are simply not reliable based on estimates provided in earlier fiscal documents.

I had previously indicated how the estimates for public debt charges increase as the government releases subsequent fiscal documents. For example, the estimate for public debt charges for 2023-24 — that’s the year just ended — increased from $32 billion in Budget 2022 to $43 billion in the 2022 Fall Economic Statement over a mere six-month period. Similarly, Budget 2022 estimated program expenses for last year to be $430 billion. Just six months later, the 2022 Fall Economic Statement increased the $430 billion to $443 billion.

With the release of Budget 2024 in April, we can now see how the estimates for program expenses and debt service costs for this year, 2024-25, have increased with each budget and fall economic statement, starting with Budget 2022. Program expenses for this year were estimated at $439 billion in Budget 2022. Then the estimate increased to $457 billion in the fall fiscal update in 2022. Then it increased to $463 billion, and then it increased to $466 billion, and now it is at $480 billion in Budget 2024.

Public debt charges show a similar trajectory. Debt service charges for this year were estimated at $37 billion in Budget 2022. Then the estimate increased to $42 billion, then to $46 billion, then to $52 billion, and now it is at $54.1 billion in Budget 2024. This problem does not apply to just these few examples. Estimates change frequently and by significant amounts. The projected estimates in any budget document or fall economic statement are simply not reliable.

There is a similar problem with the information provided on the government’s borrowing program. The Debt Management Strategy outlined in Budget 2023 indicated that the government would issue $414 billion in treasury bills and bonds, yet the Fall Economic Statement — issued just seven months later — has increased this $414 billion to $485 billion, an increase of $71 billion — with no explanation.

In other cases, numbers in the financial projections appear without adequate explanation. Costs of new initiatives are reduced using the explanation of “funds previously provisioned in the fiscal framework,” without indicating where in the fiscal framework these funds are located. Similarly, estimates related to non-announced measures provide no further information or explanation.

In a recent National Finance Committee meeting, this problem was raised with the Parliamentary Budget Officer. He told the committee that he could provide no insight into these financial transactions, indicating that future fiscal documents would not add any clarity or explanation to these questions. When the government speaks about being transparent and accountable, it cannot possibly be referring to its financial documents.

The costs of many new initiatives outlined in the Fall Economic Statement are back-end loaded; that is, the majority of the costs will be incurred toward the end of the program rather than at the front end. For example, removing the GST from new co-op rental housing — called the GST New Residential Rental Property Rebate program — was estimated to cost $4.5 billion and is now expected to cost $150 million in 2023-24 and 2024-25. The remaining $4.3 billion is projected to be spent after the next federal election. In fact, the Fall Economic Statement estimated that the newly announced housing programs will cost $6.249 billion up to March 31, 2029, yet only $140 million will be incurred in this fiscal year.

Honourable senators, Canada is in the midst of a housing crisis. There is a shortage of homes. Those with homes are renewing their mortgages at higher rates. Apartments are in short supply, and the cost of rental housing has increased significantly. As well, Canada now has tent cities within many of its towns and cities. Homelessness has also increased.

The central theme of the Fall Economic Statement is the housing crisis, with the major program being the removal of the GST from new rental housing at an estimated cost of $4.5 billion over the next five years. In addition, Bill C-59 will enact the department of housing, infrastructure and communities act, with the objective of improving accessibility to housing.

The removal of the GST from new co-op rental housing is intended to create financial incentives to build more homes faster by removing the GST from new purpose-built rental housing projects such as apartment buildings, student housing and senior residences. Although the program was estimated to cost $4.5 billion over five years, the government has provided no estimate of the number of homes to be constructed over the five‑year period. The Minister of Finance, in addressing this question, acknowledged that the government had not estimated the number of housing units to be built with the $4.5 billion but said that one of Canada’s top housing experts had estimated that 200,000 to 300,000 homes could be built with the $4.5 billion.

The GST rental rebate program was enacted in December by Bill C-56. Government officials indicated at the time that the details of the program, which were noticeably absent from the bill, would be provided at a future date in regulations. It is now June, and while there are draft regulations, there are no final regulations. Government officials recently told us that regulations usually take 18 to 24 months after the legislation has been enacted. The regulations include the details, and we cannot understand a program until we see the details.

The Fall Economic Statement indicated that the GST rental rebate program will run until 2035, or for 12 years. However, the estimated costs provided were for six years only — to 2028-29. No estimated costs were provided for the following six years.

Subsequent to the release of the Fall Economic Statement, the government released its housing plan, Solving the Housing Crisis. I expected the information in the fall fiscal update on the GST rental rebate program to align with the information on the GST rental rebate program in Canada’s Housing Plan.

The housing plan is expected to build 3.5 million new housing units by 2031, with 1.2 million homes being built by federal government programs. The plan indicates that the GST rental rebate program will kick-start the construction of up to 300,000 new homes. I was surprised to see the reference to 300,000 new homes in the housing plan — because the government had not used their own estimate but rather the upper bounds of an estimate provided by a third party.

In addition, the cost of the GST rental rebate program only extends to 2028-29, yet the deadline for construction of those 300,000 units is 2036 — seven years after the funding ends. And there is no estimate of the cost of the program from 2029 to 2036. Since the 300,000 new housing units do not have to be constructed until 2036, how does this fit into the government’s objective to construct 1.2 million new housing units by 2031?

The numbers just don’t align.

The government had no housing plan before April of this year. This was confirmed by the former president and CEO of the Canada Mortgage and Housing Corporation, or CMHC, in a Finance Committee meeting and the Minister of Housing at a Banking Committee meeting. Although the government released its National Housing Strategy in 2017 and has announced many housing programs since then, the lack of a plan significantly hinders understanding around how the various housing programs will work together to address the housing problems being experienced.

While many of the housing programs announced the number of housing units to be created in the future, there is little to no information on the homes actually built under each program. For example, the 2023 Fall Economic Statement, which supports this bill, spends two pages outlining the homes to be built in the future under the Housing Accelerator Fund, but there is a scarcity of information as to the number of homes actually built thus far under this program, and no commitment to indicating when the housing units being funded will actually be completed.

In 2022, the Canada Housing and Mortgage Corporation released a report which indicated that Canada needs an additional 3.5 million housing units by 2030. Last September, an update to the 2022 report indicated that the gap of 3.5 million housing units by 2030 still exists, although the supply gap has changed across provinces — so the numbers shifted a bit, but still total 3.5 million.

On April 12 of this year, the government finally released its housing plan entitled “Solving the Housing Crisis: Canada’s Housing Plan.” According to a press release from that day, the objective of the plan is “. . . to unlock 3.87 million new homes by 2031. . . .” In that press release, the Prime Minister referenced that the plan is intended to support the building of 1.2 million housing units. For the remaining 2.6 million housing units, the Prime Minister called upon all orders of government to build 800,000 housing units by 2031, indicating that the remaining 1.87 million housing units were — as the Prime Minister phrased it — “. . . being built anyway . . . .”

Honourable senators, Canada’s Housing Plan has serious shortcomings. The plan itself does not indicate the government’s housing objectives. Rather, the objectives were disclosed in the Prime Minister’s press release.

The housing plan merely lists off the various housing programs funded by the federal government, their costs and the number of housing units to be built by each housing program by 2031. There is no plan with respect to how many of the 1.2 million housing units will be built each year leading up to 2031. Must we wait until 2031 for a progress report?

The government’s own commitment to build 1.2 million housing units is as exceedingly ambitious as the overall objective to construct 3.87 million housing units by 2031. This means that over the next seven years, an average of 550,000 housing units must be created annually, and yet there is no requirement for the government to report on the number of housing units created by any program on an annual basis.

Even the participants in the government’s own surveys on housing were of the view that until the government presented tangible, measurable information that showed that the government was making progress on the housing crisis, they would continue to feel that the federal government was on the wrong track for housing.

The CMHC recently reported on housing capacity last year, which indicates how the housing plan is progressing. They indicated that there were 650,000 workers in the construction sector last year, but housing starts only totalled 240,000, below the 400,000 that could have been built if those workers were used to capacity.

These 240,000 housing units were nowhere near the number required for the government’s target of 3.87 million new homes by 2031. The CMHC indicated that so far this year, housing data to April 2024 indicated that the six-month trend in housing starts decreased 2.2%, from 243,900 units in March to 238,500 units in April. They said the six-month trend measure is a six-month moving average of the seasonally adjusted annual rate of total housing starts for all areas of Canada.

The federal government has spent and continues to spend billions of dollars for new housing construction, loans and tax breaks, creating new programs and increasing the amounts spent on existing ones to encourage the construction of new homes, but these initiatives have not had a major impact. In fact, housing starts have declined rather than increased.

Honourable senators, Bill C-59 establishes the Department of Housing, Infrastructure and Communities. Given that the government is creating a new housing department to respond to the housing crisis, I expected the new housing act to be more robust. Excluding the transitional provisions of the bill and the consequential amendments, the proposed act is a mere three and a half pages. Noticeably absent from the proposed housing act is a requirement for an accountability report to be tabled in Parliament annually by the Minister of Housing. It was not lost on me that the official presenting the new housing act at our Finance Committee was the ADM of Policy and Results, because there is nothing in this bill that requires any reporting on results. At a minimum, the minister should be required to annually report the number of housing units actually built under each of the federal housing programs. This would give an annual update as to the progress government was making in its own goal of constructing 1.2 million housing units.

Compare this proposed act to Bill C-50 — and I am not supporting Bill C-50 when I say this; I am just outlining what is in that legislation. That bill is also before Parliament, but it requires a detailed action plan, identifies what is to be included in that action plan and requires the plan to be tabled in Parliament.

In addition, Bill C-50 requires progress reports, which must also be tabled in Parliament. Given that Canada is in the midst of a housing crisis and creating a new ministry to respond to it, it is unfathomable that the new act does not require annual reports to Parliament.

Honourable senators, while the government is struggling to build more housing units, Canadians are struggling with the higher costs of mortgage debt. A recent survey by the Angus Reid Institute found that the number of Canadians who say that their mortgage is very difficult to pay has doubled since last March. Specifically, in March of last year, 8% of mortgage borrowers said they’re struggling. Last October, this 8% had increased to 15%, and it continues to increase.

Mortgage borrowers with variable-rate mortgages have seen their payments climb steadily since the Bank of Canada raised interest rates 10 times since March 2022 — just two years ago. Rates were raised by the Bank of Canada from 0.25% in March 2022 to 5% in September 2023. For those who took out mortgages between 2018 and 2020, their payments will most likely see significant increases when they renew their mortgages. Almost 60% of those who must renew their mortgages within the next 12 months are very worried.

Canadians who rent are facing similar concerns. Data released in March by Rentals.ca and Urbanation indicates that the average asking price for rental housing in Canada was $2,193 per month in February — up 10.5% year over year and the fastest annual growth since September 2023.

Compared to two years ago, rents in Canada have increased 21% or, on average, $384 per month. The Angus Reid Institute survey found that Canadians are increasingly negative about their financial situation and prospects, and 50% say they are in worse financial shape than a year ago, while 35% expect to be in worse financial shape a year from now. The Angus Reid Institute said that this data ties with the worst data seen in 13 years of data collection by them.

Similar data released by the institute in January indicated that 61% of Canadians say they cannot keep up with the cost of living — the third year in which a majority of those surveyed expressed a similar concern. Of those surveyed, 43% say they are always or often stressed about money — a 12-point increase since 2018.

Increasing mortgage payments and rising rents are contributing to this environment. There are 49% of renters who say they are worried that they won’t be able to cover their housing costs within the next six months, and 32% of mortgage holders say that without reduced interest rates, they are also worried that they won’t be able to cover their housing costs within the next six months.

There are 61% of Canadians who say they cannot keep up with the cost of living. Rising costs appear to be affecting lower incomes more, as we would expect, but even a majority of households earning six figures or more say they can no longer keep up. This data is consistent with the government’s own data.

While Canadians with mortgages and Canadians who rent are facing difficulties, there’s another group of Canadians who are facing housing challenges: It’s Canadians who are homeless, some of whom are living in encampments, or tent cities, as they are commonly known. These are people who do not have any housing due to reasons such as unavailability of affordable housing.

Many Canadian cities now have tent cities or encampments. Some residents of encampments have previously used homeless shelters, but even homeless shelters are being stretched during the affordability crisis.

Last year, Canada’s first Federal Housing Advocate launched a formal review of encampments in Canada, with the objective of presenting a report along with recommendations to the Minister of Housing, Infrastructure and Communities to address the systemic housing issues faced by people who are homeless. In February of this year, she released a report on homeless encampments. She indicated that she had met with and heard from people who had experienced encampments across the country. Her report was designed to place them at the centre of efforts to reduce homelessness.

In her report, she said that there’s been a significant rise in encampments in the last five years, and particularly since the COVID-19 pandemic. Canada has the capacity, she said, to solve the crisis. What is lacking is sufficient political will, resources and coordination. The absence of effective coordination between many agencies, departments and jurisdictions involved limits the effectiveness of responses to the homelessness crisis. She said the national crisis calls for a national response.

In her report, the Federal Housing Advocate is recommending that the federal government establish a national encampments response plan by August 31 of this year. The report’s findings and recommendations were submitted to the federal Minister of Housing, Infrastructure and Communities on February 8, which was a few days before it was officially released, at which time the Federal Housing Advocate met with the minister.

The National Housing Strategy Act specifies that when the federal government receives the report of such a systemic review, the minister responsible for housing must respond within 120 days. We have not yet reached the 120-day deadline, so the minister’s response at this time is not known.

Last week, the Parliamentary Budget Officer released a report on federal funding to address homelessness. Federal funding to prevent and reduce homelessness is almost entirely allocated to the Reaching Home program at Infrastructure Canada, and Infrastructure Canada will reside in the new housing department. That program provides funding to communities to reduce and prevent homelessness.

The report indicates actual and planned spending on homelessness programs at Infrastructure Canada by year over a 20-year period from 2008 to 2027-28. Actual and planned spending averages $561 million a year between 2018-19 and 2027-28, and this is an increase in nominal spending of $443 million over the prior 10 years.

Between 2019-20 and 2022-23, the funding of the Reaching Home program has supported placements in more stable housing for almost 18,000 people annually, emergency housing funds for 5,400 people annually, and core prevention services for 31,000 people annually.

Canada’s National Housing Strategy initially set a target to reduce chronic homelessness by 50% by 2027-28, and, more recently, the government has committed to eliminating chronic homelessness by 2030.

The report of the Parliamentary Budget Officer concludes that the best available evidence suggests that homelessness has increased, despite the funding provided under the Reaching Home program. According to data published by Infrastructure Canada, the number of homeless people had increased by 20% relative to 2018, reaching 34,000 people, while the number of chronically homeless people had increased by 38% relative to 2018, and the number of people living in unsheltered locations had also increased by 88%.

Given these two recent reports addressing homelessness in Canada — one by the Federal Housing Advocate, and one by the Parliamentary Budget Officer — I expect Canada’s housing plan will have to be revisited by the minister responsible for housing to determine whether the plan requires any changes.

Honourable senators, nine years ago, this government released a 2015 election platform called Real Change: A New Plan for a Strong Middle Class. They promised they would make it easier for Canadians to find an affordable place to call home. They promised they would renew federal leadership in housing, and they promised to prioritize investments in affordable housing, build more new housing units and refurbish old ones. They also promised to review home prices in high-priced markets, such as Toronto and Vancouver, to keep home ownership within reach for more Canadians.

They promised to encourage the construction of new rental housing by removing all GST on new capital investments in affordable rental housing. They did keep this promise, but they just didn’t tell us that we would have to wait nine years — until we had a major housing crisis — before they would honour their promise.

Honourable senators, the Fall Economic Statement and Bill C-59 continue the government’s focus on supporting a strong middle class. Since 2015, the government has focused on the middle class and those working hard to join it. The government put forward a new plan for a strong middle class, growth for the middle class and economic security for the middle class. Each budget and fiscal update released by this government was focused on the middle class: growing the middle class, building a strong middle class, equality and growth for a strong middle class, investing in the middle class, and A Made-in-Canada Plan: Strong Middle Class, Affordable Economy, Healthy Future.

Even the fall fiscal updates were focused on the middle class. Chapter 2 of the 2023 Fall Economic Statement, which was released just before Christmas, focuses on supporting a strong middle class. We even had a Minister of Middle Class Prosperity at one point in time. However, despite the government’s focus on the middle class, the middle class is not doing well under this government.

Former finance minister Bill Morneau — this government’s first finance minister — was consistently asked in our National Finance Committee meetings to define the “middle class” since it was the intended recipient of the government’s many programs. Unfortunately, he did not know. When Mona Fortier, the former Minister of Middle Class Prosperity, was asked to define “middle class,” she also did not know.

I could not understand how a government could know if its middle class was growing if it did not define the criteria to determine who was in the middle class. This information was needed to determine who was in the middle class at the beginning of the initiative, and updated data would be used to determine whether or not the middle class was growing.

The Organisation for Economic Co-operation and Development, or OECD, has released data that shows Canada’s middle class is actually shrinking and not growing, despite this government’s programs over the past nine years focusing on the middle class. The OECD profile said that Canada was losing its middle class relative to the rest of the developed world, and that Canada’s share of middle-income earners has shrunk more than most others. The OECD said the number of Canadians living in middle-income households was 58% compared to the OECD average of 61%.

In a 2020 poll by Polaris Strategy + Insight, 79% of respondents expressed confidence that their children would reach the middle class through hard work. In 2023, just three years later, that 79% had dropped to 52%.

Honourable senators, the shrinking of the middle class is just one indication that Canada is becoming poorer compared to its peers. Per capita GDP in Canada has been trending downward for four decades, accelerating under this government. While the government likes to tell us that total GDP is growing, so is our population, and each person’s share of that GDP is shrinking. Adjusting for inflation, each Canadian’s share of the GDP is actually lower than it was in 2014. In 1981, Canada’s per capita GDP was 92% of that of the U.S. We were sixth among OECD countries in GDP per capita. By 2022, our per capita GDP, compared to the U.S., had fallen from 92% in 1981 to 73%, and we have fallen from sixth place in GDP in 1981 per capita to fifteenth place. Countries that were poorer than us in 1981 have moved ahead and are now richer than us, and we are moving toward being one of the poorer countries.

Budget 2022 told us — this is in Minister Freeland’s budget book — that “. . . the OECD projects that Canada will have the lowest per-capita GDP growth among its member countries . . . .” from 2020 to 2060.

Honourable senators, there have been numerous media articles with references to Canada’s GDP growth and the decline in Canada’s GDP per person, and I offer my comments on these economic indicators.

The real value of final goods and services produced in the economy during the period of inflation-adjusted GDP is the most widely used measure of overall economic activity. GDP is not the only indicator of economic performance. Measures of business investment and labour market outcomes are also important indicators of economic performance, and many of those are included in the minister’s budget documents.

The government cites GDP growth in many of its fiscal documents, including the 2023 Fall Economic Statement, which supports this Bill C-59 that we are debating today. The 2023 Fall Economic Statement includes data on real GDP growth, both historical and projected, as well as data on the labour market. In fact, the Fall Economic Statement indicates that between the first quarter of 2022 and the second quarter of 2023, Canada had the highest real GDP growth among G7 countries. The G7 countries include Canada, France, Germany, Italy, Japan, the U.K. and the U.S. In addition, between 2000 and 2023 Canada had the second‑highest rate of GDP growth in the G7.

GDP is usually measured in aggregate or per person, and many economists are of the opinion that GDP per person is a more useful measure of a country’s living standards when comparing data over time or among countries. When I say this, I say it as an accountant because I’m not an economist, although I’ve been reading to try to become familiar with what’s happening in the economy.

While Canada’s GDP growth in aggregate appears favourable when compared to other G7 countries, it had among the lowest growth rates when measuring GDP per person. In fact, when measuring GDP growth per person, Canada had the lowest growth rate in the G7. The Fraser Institute recently released a study in which they carried out a very detailed analysis of GDP per person over each of the 40 quarterly periods between 1985 and 2023. In other words, they analyzed data from 40 fiscal quarters in detail. Their analysis focused on the relative depth and length of each decline in GDP per person, as well as the length of recovery. Their analysis also compared the duration and extent of real GDP per person growth between the various periods of decline.

Their analysis indicated the following: Over the 40-year period there were nine periods of consecutive quarters of declining real GDP per person, followed by subsequent periods of growth. The 12-quarter decline from the second quarter of 1989 to the second quarter of 1992 was the longest period of decline over the entire 40 years analyzed, during which the GDP per person declined by 5.3%. The declines in the fourth quarter of 2014 to the second quarter of 2016 and from the second quarter of 2022 to the fourth quarter of 2023, which just ended, are tied for the second-longest decline of six quarters each. For the period between 2014 and 2016, real GDP per person decreased by 1.5%.

For the more recent period, between the second quarter of 2022 and the fourth quarter of 2023, there was a decline of 3.4% in GDP per person. I wrote here that the data is not yet available to determine whether there will be a continuing decline in 2024, but the information was actually released this morning. However, the fourth quarter of 2023 declined 0.8% from the third quarter of 2023, so it cannot be assumed that the decline in GDP per person ended in the fourth quarter of 2023. The fourth-largest decline occurred between the second quarter of 2019 and the second quarter of 2020, when there was a 13.6% decline.

The analysis concluded that since the middle of 2019 — that’s the second quarter of 2019 — Canada has experienced one of the longest and deepest declines in real GDP per person over the last four decades. There was a brief recovery in the second quarter of 2022, but it appears that it was simply a brief interruption of what seems to be a larger decline. For 16 of 18 quarters between the second quarter of 2019 and the fourth quarter of 2023, real GDP per person has been below the level recorded in the second quarter of 2019. It is said that the decline since the second quarter of 2019 represents one of the longest and deepest declines in GDP per person since 1985, exceeded in both respects only by the decline in recovery that occurred from the second quarter of 1989 to the third quarter of 1994. However, the decline since 2019 is ongoing and may exceed in length the downturn of the late 1980s and early 1990s.

This morning, I got an email that said they now have the numbers for the first quarter of 2024. Inflation-adjusted GDP per person actually fell 0.2% during the first quarter of 2024. It said that the reason the economy is growing while living standards are falling is due to the rate of economic growth not being fast enough to account for the growth in population. During the first three months of 2024, the economy grew by 0.4%, while the population grew by 0.6%.

I’m going to move on to universal health care, because the fall fiscal update provides an overview of the health care funding to provinces and territories over the next 10 years, including incremental funding over the levels provided in 2022-23.

Health care funding provided in 2022-23 was $47 billion, increasing to $52 billion this year and increasing in the future to $62.8 billion in 2028-29. Despite historic levels of spending on health care, 6.5 million Canadians do not have a doctor, and this number is expected to increase.

Emergency rooms are full, and we have all heard stories of people dying in emergency rooms while waiting for health care. Many Canadians are wait-listed for medical procedures and surgeries, and many people are living in pain while waiting in the queue for health care.

A study last year indicated that Canada spends more on health care than the majority of high-income Organisation for Economic Co-operation and Development, or OECD, countries with universal health care systems. The study compared the cost and performance of 30 universal health care systems in high-income countries. After adjusting for age — that is the percentage of the population over 65 years old — Canada ranks highest for expenditure as a percentage of GDP and ninth highest for health care expenditures per capita.

Data from the study also suggests that Canada has fewer human capital medical resources than many peer jurisdictions that spend comparable amounts of money on health care. For example, we have fewer positions and fewer medical technologies than the average high-income OECD countries with universal health care for which comparable data is available.

In summary, the data suggests that although Canada has one of the most expensive universal access health care systems in the OECD, its performance is modest to poor.

I wanted to talk about a poll that was commissioned by the Montreal Economic Institute. I see my time is short, so I’m going to speak fast.

Government continues to explain the virtues of Canada’s universal health care system, saying that the promise of access to our universal health care system is at the heart of Canada’s social safety net. The poll included a sample of 1,116 Canadian residents aged 18 years and over with an over sample of residents in Quebec who were interviewed between March 22 and March 27 of this year. The weighting of quotas according to age, gender, region and language were employed to ensure the sample’s composition reflects the overall population, according to the latest census.

Here are the key findings, and I thought this was interesting: Less than half of Canadians — 48% — are satisfied with their provincial health care system. Satisfaction is lowest among Atlantic Canadians at 30%. Seven in ten Canadians believe that private entrepreneurs can deliver health care services faster than the hospitals managed by the government, with 77% of Quebec residents thinking this way.

Only a quarter of Canadians — 25% — think that the additional monies injected into the health care system over the past 10 years — that’s billions of dollars — has led to improvements, and 33% have said that the system has actually worsened.

Half of Canadians would like increased access to health care provided by independent entrepreneurs, and more than half of Canadians agree that the rate of spending in their provincial health care system is unsustainable.

Honourable senators, private health care has arrived in Canada, regardless of whether we agree with it or not. Our universal health care system is on the brink of collapse — some people say it has actually collapsed — with a shortage of doctors, nurses and health care professionals. Canadians seeking health care are tired of queuing up.

While many Canadians will be able to pay for private health care, many Canadians languish on long waiting lists and will not be able to afford private care.

I have a few words to say on this. I spent a bit of time preparing. I may not take questions.

The 2023 Fall Economic Statement provides an update on the implementation of the Canada-wide early learning and child care program, which was announced in the 2021 budget. Budget 2021 included a $30 billion commitment to establish a $10-a-day child care program within five years. The federal government negotiated with each province and territory and negotiated a unique agreement with Quebec — which had a program already — to jointly determine the funding and goals. These negotiations resulted in a Canada-wide early learning and child care agreement with each province and territory.

Two of the commitments of the program are to create 250,000 new child care spaces across the country by March of 2026 as well as the hiring of another 40,000 early learning childhood educators, also by March of 2026.

In addition to providing an update of the program by province and territory, the Fall Economic Statement also discloses separately the annual cost of the program up to and including fiscal year 2028-29. While the Fall Economic Statement indicates some provinces and territories are already delivering $10-a-day child care, not all families are able to access $10-a-day child care spaces. In fact, many families are unable to access any child care at all, leading to a crisis across the country in many places which are now being referred to as “child care deserts.”

Child care waiting lists have ballooned across the country as demand is far outpacing the creation of new spaces. In addition, operators of child care centres in some provinces are threatening to pull out of the program or close their centres, saying that they’re going bankrupt trying to make ends meet. They say that the federal-provincial agreements which limit the fees they can charge are not providing enough funding to cover costs.

While funding to cover operating costs is a major problem in many areas, staffing daycares is another issue. Many child care programs are operating at a reduced capacity and are limiting their enrolment because they cannot recruit enough early childhood education workers. The staffing crisis is a major obstacle to expanding the child care sector and meeting the objectives of the new early learning and child care program.

An analysis by Cardus, a public policy group, said that the roll out of the child care expansion programs in British Columbia, Saskatchewan and New Brunswick have all been slow to start and have an underwhelming result. In its first year, New Brunswick created only 300 new child care spaces out of the 3,400 additional spaces, which is their five-year target.

The Fall Economic Statement says that more than 50,000 new spaces have already been created across Canada. However, we are now into the fourth year of the five-year program, and the objective by the federal government was to create 250,000 child care spaces by March of 2026 — less than two years away.

Budget 2024 includes $1 billion for a child care expansion loan program. However, Canada Mortgage and Housing Corporation, or CMHC, officials have indicated that the loan program has yet to be established, and loans are not expected to be available until the next fiscal year.

It remains to be seen whether many of the child care centres will survive their financial difficulties or whether the promised loan program will provide the financial assistance needed. Given the problems being encountered, it is highly doubtful that 250,000 child care spaces will be created by March of 2026, nor will there be 40,000 new child care educators.

Earlier this month, the Bank of Canada released its Financial Stability Report—2024. This report assesses the stability of the Canadian financial system. The report concludes that Canada’s financial system remains resilient. However, risks to financial stability remain, and the following summarizes some of the concerns highlighted in the bank’s report, which are symptomatic of the affordability crisis.

Although the report indicates that most households are adapting to higher interest rates, some are showing signs of financial stress. The share of borrowers without a mortgage who are behind on their credit card and auto loan payments have returned since the pandemic to more normal levels or have surpassed them. Signs of stress are concentrated primarily among households without a mortgage, and survey data suggests that renters are most affected.

As I mentioned in my earlier comments — or as somebody else did — the cost of rental accommodations has increased significantly over the past few years, and this is impacting householders’ ability to repay their debts.

The rate of arrears on credit cards and auto loans for households without a mortgage, which includes renters and outright homeowners, are back to pre-pandemic levels and continue to increase. However, arrears on credit cards and auto loans for households with a mortgage have remained low and stable. Borrowers without a mortgage who carry a credit card balance of at least 80% of their credit limit are significantly more likely to miss a future payment. Over the past year, the share of these borrowers has continued to increase.

For those holding mortgages, about half of them have yet to face higher rates. They will generally face a larger payment increase than those who have already renewed. Households that took out mortgages in 2021 and early 2022, when house prices were close to their peak and the mortgage rates were very low, will experience the largest increase. Regardless of whether a household rents or holds a mortgage, both categories will be faced with financial pressures.

The increasing stress that borrowers face have not significantly impacted large banks, but some smaller mortgage lenders have seen a sharp increase in credit arrears. Mortgage holders will also face pressure as they refinance their existing mortgages at higher prices.

Honourable senators, the Office of the Superintendent of Financial Institutions, or OSFI, is an independent agency of the Government of Canada responsible for supervising federally regulated financial institutions and pension plans to contribute to public confidence in Canada’s financial system. It regulates and supervises more than 400 financial institutions and 1,200 pension plans.

On May 22, 2024, the office released its Annual Risk Outlook for 2024-25, providing an overview of the current risk environment and identifying the top risks facing Canada’s financial system. While the outlook focuses on a number of risks, including risks from commercial real estate lending as well as corporate and commercial debt, which remain a significant exposure for institutions, my comments focus on the risks associated with mortgage debt and the impact that mortgage debt has on the affordability crisis affecting Canadian families.

The Office of the Superintendent of Financial Institutions expects that elevated interest rates and market volatility will result in increased mortgage renewal refinancing risk, higher borrowing costs, decreased consumer spending and decreased business investment. The Canadian labour market at this time remains relatively strong, but the Office of the Superintendent of Financial Institutions cautions that if the labour market weakens, it could have a material impact on the credit quality of mortgages and other consumer debt.

There are signs that higher mortgage payments are taking up a larger part of some households’ incomes, leading to increases in the number of borrowers not being able to make payments on other loans and debts. Of the mortgages outstanding as of February 2024, 76% will be renewing by the end of 2026. The payment shock caused by their higher, revised payments will be significant for homeowners who took out mortgages when interest rates were lower in 2020 to 2022. Households which are more heavily leveraged and have mortgages with variable rates but fixed payments will feel the shock more acutely. OSFI expects payment increases to lead to a higher incidence of residential mortgage loans falling into arrears or defaults. Mortgages that have already experienced payment increases due to renewal or product type, such as adjustable-rate mortgages, are already showing higher rates of non-performance.

During his appearance at the Banking Committee, the Superintendent of Financial Institutions has emphasized on many occasions that variable-rate mortgages with fixed payments are of specific concern. Variable-rate mortgages with fixed payments make up a significant portion of outstanding residential mortgages in Canada. At 15%, some of these mortgages are negatively amortizing, meaning the mortgage payments are no longer sufficient to pay the interest or the principal. As a result, the shortfall is added to the principal of the mortgage, and new mortgage payments will be based on the now-increased principal.

The Office of the Superintendent of Financial Institutions indicates that it will continue to engage with industry to ensure that institutions actively assess the risks posed by variable-rate mortgages with fixed payments. This would include:

. . . ensuring that adequate provisions and capital are in place to offset the increased credit risk, as well as promoting early intervention (prior to renewal) with borrowers vulnerable to payment shock.

Honourable senators, since the government released its 2023 Fall Economic Statement last November, it has released two reports on Canada’s debt.

The government has seen recurring deficits each and every year since it was elected in 2015. As a result, it has to borrow to finance the expenditures in excess of government revenues. I think they are still waiting for this to balance itself. That wasn’t Senator Marshall’s comment. That was my comment.

Included in each and every budget and fall economic statement is an update of the government’s Debt Management Strategy, which describes, among other things, planned borrowing activities, the sources and amounts of borrowing, how those borrowings will be used and the outlook for public debt charges.

The Fall Economic Statement provides an update to the Debt Management Strategy published in last year’s budget. In its strategy, the government is reporting an increase in the issuance of bonds and treasury bills from $414 billion to $485 billion, an increase of $71 billion. No reason for the increase is provided. The government is also reporting an increase in public debt charges for the last fiscal year — that is, 2023-24 — from the $43.9 billion published in Budget 2023 to the $46.5 billion now being reported in the Fall Economic Statement.

The Fall Economic Statement is also reporting an increase in the public debt charges for this fiscal year — that is, 2024-25 — from the $46 billion in last year’s Budget 2023 to the $52.4 billion in the 2023 Fall Economic Statement. With the recent tabling of the new budget, for 2024-25, the government has once again increased the estimated cost of debt servicing charges for this year to $54.1 billion.

To summarize, debt servicing costs for this year have increased over a 12-month period from $46 billion in last year’s budget to $52.4 billion in the Fall Economic Statement and then to $54.1 billion in this year’s budget. That is an $8.1 billion increase over a 12-month period, which is 18%.

All of the estimated debt servicing costs have shown significant increases. Budget 2023 estimated that debt servicing costs for 2027-28 would be $50.3 billion. One year later, the $50.3 billion has increased to a staggering $60.9 billion.

Estimates for debt servicing continually increase as the government releases each new fiscal document. In addition to providing an update on its debt management strategy in each budget in the form of the fall economic statement, there is a statutory requirement in the Financial Administration Act to table a debt management report each year within 30 days of tabling of the Public Accounts.

Unfortunately, the government does not release the debt management report until the last day, the statutory deadline, in which case the debt management report was released before Christmas — the data was nine months old.

That report indicated that, as of March of 2023, the government’s market debt was $1.259 trillion, including the market debt of Crown corporations. This $1.259 trillion increases to $1.574 trillion.

Tabling a borrowing authority report once every three years is also a statutory requirement under the borrowing authority.

I’m getting depressed.

The most recent borrowing authority report was tabled on May 3 of this year. The Borrowing Authority Act specifies a maximum debt limit for the government; it currently stands at $1.831 trillion. This report indicates a more current total borrowing of $1.710 trillion as of March 23, 2024.

Given that government borrowing is nearing its ceiling, we have been expecting legislation that proposes to increase the ceiling. This increase is included in Bill C-69, which proposes to raise the government’s debt ceiling from $1.831 trillion to more than $2 trillion.

Colleagues, this is a depressing scenario.

I want to thank Senator Marshall for the tremendous work she did and for the help she gave me in preparing my speech.

As I am sure Senator Marshall would agree, this is something we cannot support. We would certainly encourage everyone to take another look at this. We would be prepared to vote against this today. I will let the chips fall where they may.

Thank you, colleagues.

Thank you for that question, Senator Wallin. It reminds me of the question that Senator Cuzner asked the Minister of Fisheries earlier: he lobbed it out there and let her bat it out of the park.

This government has shown clearly, as was illustrated in my and Senator Marshall’s remarks, that this government has no ability to rein anything in. Our Minister of Finance has shown us that. They have gone on a spending spree that will continue.

I know this is an old cliché and an old saying: The budget will balance itself. I think the Prime Minister believes that, because he has never balanced a bank book in his life, and he is not about to start now.

I’m sorry. Yes, I would suggest that is what it indicates.

Senator Plett, will you take another question?

If it is an easy one.

An easy one you asked for; an easy one I will deliver.

I want to remark that the speech you delivered was informative, balanced and reasonable. In saying that, I thank Senator Marshall for her ongoing work in this chamber. I think of her as a resource for all of us, and I truly appreciate that.

My question, Senator Plett, is, would you consider asking Senator Marshall to hold the editing pen on all of your speeches in the future?

Well, Senator Lankin, I also appreciate Senator Marshall. I can only hope and pray that Senator Marshall will be in this august chamber in 2025 when the right people will be on the other side of the chamber and Senator Marshall will, indeed, be able to help the Pierre Poilievre government balance the books, which this government has never been able to do.

I always cherish Senator Marshall’s input in anything and everything I say in the Senate. Thank you.

Are senators ready for the question?

Is it your pleasure, honourable senators, to adopt the motion?

On division?

All those in favour of the motion will please say “yea.”

Some Hon. Senators: Yea.

The Hon. the Speaker: All those opposed to the motion will please say “nay.”

Some Hon. Senators: Nay.

The Hon. the Speaker: In my opinion the “yeas” have it.

I see senators rising.

Is there an agreement on a bell?

Senator Saint-Germain, Senator Downe, is there agreement on a 15-minute bell?

Yes.

A 15-minute bell, Senator Dalphond?

Yes.

Is leave granted, honourable senators?

The vote will be at 6:33. Call in the senators.