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ALBAS: Liberals must deal with federal debt

Dan Albas, member of Parliament for Okanagan-Coquihalla.
Image Credit: Contributed
November 19, 2016 - 12:30 PM

 


OPINION


Editor,

This week in Ottawa I had a second opportunity to speak in opposition to the Liberal Government’s budget implementation bill. Aside from the fact that thus far the Liberal plan has resulted in economic downgrades and we've seen none of the 40,000 net new jobs that was promised in Budget 2016, I also raised the uncomfortable issue of debt. As it stands today looking at the 2013/2014 fiscal year the Federal Government spent just over $28 Billion a year servicing debt.

To put that number into perspective that is currently almost as much money as is spent on the Canadian Health Transfers to provinces that was just over $30 Billion in that same year. In other words the Federal Government is currently spending almost as much money on servicing debt as it is spending on healthcare and this Liberal budget increases debt by another $25 Billion this year alone and is on track to add $113 billion in new debt by the 2020-21 fiscal year. 

There is also no longer any plan to return to a balanced budget. Given that debt is rising at the same time health care funding increases are being reduced the Federal Government will soon spend more on debt interest then healthcare, a fact I believe many will find troubling.

However as I have also pointed out in Ottawa, it is easy to be a critic. Part of my commitment to citizens in our region as an opposition MP is to not just oppose but also from time to time propose alternative ideas that can build a stronger and more prosperous Canada. What did I propose the Liberal budget should do instead?

First I made it clear that I do not believe that MP’s and other citizens earning up to $199,000 per year need an income tax cut as the Liberals are proposing in this budget. Recently as many potential home owners have discovered, the Liberals are making changes to the mortgage rules that are so severe by the departments own internal projections our Canadian housing market may lose 10% of all sales this year. This will adversely impact many families not just in our region but all across Canada. What is more frustrating is that these mortgage changes, largely intended to combat the rising house prices in the Liberal strongholds of Toronto and Vancouver, will adversely impact the rest of Canada. This is why I frequently speak out against one-size fits all Ottawa imposed “solutions”

So what is the answer? In my view the Federal Government should not be penalizing future homeowners as a means to try and lower housing prices.  How about instead creating incentives to increase the supply of new housing? 

Increasing the new housing supply would have several benefits for Canadians. Primarily increased housing supply will help to meet demand and in turn lower prices.  Further, if more Canadians can move into home ownership and out of rentals that in turn will free up capacity for always in demand rental housing. An increased supply of rental housing can also help lower rental rates and hopefully increase affordability.

Another added benefit to increasing new home supply is that it will create jobs and help support many local economies across Canada given how many sectors are involved in the construction industry. As an added benefit much of Canada’s home building industry is supplied almost exclusively by Canadian value added wood products who would benefit from the increased activity at a time when the Federal Government has made no progress on the softwood lumber deal. 

These are only a few of the many benefits of such a policy that could be enhanced if Ottawa considered raising the threshold for the GST rebate on new housing. In my view promoting instead of penalizing new home owners is an important economic alternative proposal that could be explored in this Liberal budget.

As always I welcome your views on this or any topic before the House of Commons and can be reached at dan.albas@parl.gc.ca or toll-free at 1-800-665-8711.


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