Policies

Mr. Speaker, it is a pleasure to discuss Bill C-320, an act to amend the Corrections and Conditional Release Act.

Victims who share their contact information with the Correctional Service of Canada and/or the Parole Board of Canada.

This information includes review and release eligibility dates, which are provided to victims in an initial contact letter. Bill C-320 would require that victims be provided with an explanation of how those dates are determined. Across the country, victims of serious crimes may deserve to know how sentences are administered, including eligibility for temporary absences and parole.

Ensuring that the rights of victims are upheld is important. Our government has passed new legislation to continue to support victims’ rights in the form of Bill S-12. That legislation ensures that victims receive ongoing information about the offender after sentencing and would improve the law on publication bans by giving a greater voice and clarity to victims in regard to imposing and lifting a publication ban. Bill C-320 shares similar aims to Bill S-12.

The Canadian Victims Bill of Rights expanded the information available to victims as it relates to hearings by allowing victims who were unable to attend a hearing to request to listen to an audio recording of the parole hearing. At any time, victims may also submit information that details the physical, emotional or financial impact the offence has had on them to the Parole Board for consideration in its decision-making. They may also raise any safety concerns they may have related to the offender’s risk of reoffending.

Madam Speaker,

We all know that affordability is a top-of-mind topic, so let us consider early learning and child care through that lens. Before the early learning and child care agreements with all provinces and territories were finalized, daily child care fees ranged from $20 to $48 a day per child. Those dollars could go a long way in a grocery store or to keep children active in sports or other activities. Child care fees have been dropping across Canada, and we are continuing to work hard with our provincial and territorial colleagues to meet our March 2026 goal of a $10-a-day, on average, fee for children under the age of six in licensed child care.

Affordable child care means hundreds of dollars every month in the pockets of Canadians of all income levels. Affordable child care means money for nutritious meals on the table as prices at grocery stores remain high. Affordable child care means money for clothing and other necessities.

The Government of Canada has made an historic investment of nearly $30 billion over five years to build a Canada-wide early learning and child care system. We have done so in collaboration with provincial, territorial and indigenous partners, all of whom deserve enormous credit for their willingness to work together to give every child in Canada the best possible start in life, and in so doing, to bring financial and emotional relief to millions of families from coast to coast to coast.

Child care fees have been reduced across the country, and by 2025-26, the average fee for regulated child care spaces across Canada would be $10 a day. As families across the country are realizing, there are no losers here. It is a financial win for families regardless of their income level. Since 2015, the Government of Canada has delivered real improvements to make life more affordable for Canadians. There is no better example than the progress we have made on the new ELCC system. As of 2025-26, a minimum of $9.2 billion would be provided every year, on an ongoing basis, for affordable early learning and child care, and indigenous early learning and child care.

The return on this investment for families with young children is obvious and is supported by evidence. When we speak about affordability, it is perfectly appropriate to ask whether the country as a whole can afford it. The answer is a resounding yes. This is a plan to drive economic growth, to increase participation in the workforce, especially among mothers who want to pursue professional ambitions or further their education to get better-paying jobs.

A range of studies have shown that for every dollar spent on early childhood education, the broader economy receives between $1.50 and $2.80 in return. That would be a huge return on our early learning and child care investment.

Today, we stand at an important moment in the evolution of Canada’s approach to law enforcement and border security. With the introduction of Bill C-20, we commit to enhancing transparency, accountability, and public trust in our institutions.

The creation of the Public Complaints and Review Commission (PCRC) marks a significant advancement in our continuous pursuit of a fair and just society. Let us begin by acknowledging that the essence of law enforcement and border security relies not only on the enforcement of laws but on the public’s trust.

Trust is hard-earned and easily lost.

Public trust in law enforcement agencies is fundamental to the stability and effectiveness of legal systems worldwide. It ensures that citizens respect, obey, and support the enforcement of laws, which is critical for maintaining public order and security.

When the public trusts the police and other law enforcement bodies, they are more likely to cooperate with investigations, report crimes, and adhere to legal directives, fostering a safer community for everyone. Trust between the public and law enforcement also reinforces the legitimacy of the police in the eyes of the community. This legitimacy is crucial as it underpins the public’s compliance with laws without the need for coercion; people comply because they believe it’s the right thing to do, not just out of fear of punishment.

Moreover, high levels of trust in law enforcement correlate strongly with lower crime rates.

Communities where trust is prevalent tend to have more positive interactions with police, which helps in effective policing and less violent confrontations.

Furthermore, trust in law enforcement is essential for upholding the principles of a civilized society, where justice is seen to be done and is carried out fairly. A lack of trust can lead to a breakdown in civil order, increase in crime, and the potential for civil unrest.

Trust ensures a collaborative relationship between the community and the police, which is vital for developing strategies that effectively address local crime and safety concerns. To maintain this trust, law enforcement agencies must operate transparently and accountably, demonstrating their commitment to justice and fairness in all their actions.

The establishment of independent bodies that can oversee, review, and investigate law enforcement practices, such as complaints against police conduct, also plays a pivotal role. These measures not only help to prevent abuses of power but also ensure that the public’s concerns are heard and addressed, thus maintaining the essential trust needed for a harmonious and civilized society.

In recent years, public trust in Canadian law enforcement agencies has experienced a noticeable decline. This trend has been influenced by several high-profile incidents involving police misconduct and the broader discussions around systemic racism within law enforcement.

These factors have catalyzed public scrutiny and skepticism, prompting calls for greater transparency and accountability. Restoring public confidence remains a significant challenge and an ongoing priority for Canadian authorities. The current status and trends in American law enforcement can influence Canadian attitudes towards our own police forces.

The global nature of media and the internet means that Canadians are often exposed to prominent news stories and discussions about American police practices, especially concerning issues of police brutality, systemic racism, and accountability.

High-profile incidents in the United States, such as the killing of George Floyd, have sparked international movements like Black Lives Matter, which also resonate strongly in Canada. This exposure can impact how Canadians perceive our own police services, leading to increased calls for transparency, reform, and accountability within Canadian law enforcement agencies.

Even though policing practices and the legal framework in Canada are distinct from those in the U.S., the widespread media coverage and societal reactions to American law enforcement issues can heighten public awareness and skepticism in Canada as well. Moreover, similar underlying issues, such as racial profiling and the treatment of Indigenous peoples and minorities, are present in both countries, further aligning public concerns.

As a result, the debates and reforms happening in the U.S. often act as catalysts for similar discussions and changes in Canadian policing and public policy. The Public Complaints and Review Commission PCRC, proposed under this Bill, will replace the existing Civilian Review and Complaints Commission for the RCMP.

This new body will extend its oversight to the Canada Border Services Agency (CBSA) as well, addressing a long-standing gap in our law enforcement framework. For the first time, both these critical agencies will be under the same umbrella of independent scrutiny.

The government plans to invest $112.3 million to support the operations of the PCRC.

This substantial financial commitment underscores our dedication to building a robust mechanism that will serve Canadians long into the future. One of the key features of the PCRC will be its enhanced accountability measures. We are introducing codified timelines requiring the RCMP Commissioner and the CBSA President to respond to the PCRC’s interim reports, reviews, and recommendations within specific periods. This will address concerns about delays in responding to oversight findings and ensure that actions are timely and transparent.

Moreover, the PCRC will play a crucial role in addressing systemic racism within our law enforcement agencies. By mandating the collection and publication of disaggregated race-based data, the PCRC will provide us with the insights needed to understand and tackle these complex issues effectively.

The PCRC will also have a public education mandate. It will not only oversee and review, but also inform and educate the public about their rights and the mechanisms available for redress. Knowledge is power, and empowering our citizens is a critical step towards a more engaged and informed community.

Another significant aspect of the PCRC will be its responsibility in handling serious incidents involving CBSA personnel. This includes the ability to send observers to ensure that internal investigations are conducted impartially. This measure will enhance the credibility of the investigative processes and increase public confidence in the outcomes.

Furthermore, the PCRC will operate independently but not in isolation. It will maintain a collaborative relationship with the National Security and Intelligence Review Agency (NSIRA) to ensure that national security-related complaints are handled with the requisite expertise and confidentiality.

In closing, let us consider the broader implications of Bill C-20.

This legislation is about more than just oversight; it is about reaffirming our commitment to the principles of justice and equity that Canada holds dear. It is about ensuring that every individual—citizen or visitor—is treated with respect and dignity by those entrusted to protect and serve our communities.

Let us all look forward to a future where our law enforcement and border services are as accountable as they are effective. Together, we will continue to build a Canada that is safe, fair, and inclusive for all.

One of the cornerstones of our democracy is our electoral system, and at the root of that system is the Canada Elections Act. I would go so far as to say we all stand here today as beneficiaries of this key piece of legislation, having been chosen by Canadians through free and fair elections. The Canada Elections Act is already recognized worldwide for its robust rules, administrative procedures, tight political financing rules and strict spending limits. It is also recognized for how it promotes transparency, fairness and participation in elections.

Bill C-65 addresses three targeted priorities. The first priority is to encourage participation in the electoral process. The second priority is to enhance the protection of Canadians’ personal information. The third priority is to further safeguard the electoral process. Allow me to provide an overview on each of these priorities, starting with voter participation. Unfortunately, we know that voter turnout has been declining over the last two general elections. To help counter this trend, measures proposed in this bill aim to remove barriers to voting and expand the ability for people to participate in Canada’s federal election.

We also know that in recent decades, more and more Canadians are choosing to vote ahead of polling day, either through advance polls or voting by mail. In fact, voting at advance polls has increased in every general election since the year 2000, with over one-third of the voters choosing advance polls in the latest general election. To better respond to Canadians, Bill C-65 provides voters with an additional two days of advance polls. That means a total of six advance polling days in addition to election day, making it even more convenient for Canadians to cast their ballots.

 This is why Bill C-65 proposes five improvements to the current special ballot process. First, for the fixed-date election, voters will be able to register earlier for a special ballot at the start of the pre-election period, which is June 30, to help reduce late ballots. Second, all electors will now be able to register online a convenient option for voters.

 Third, voters will be able to cast their ballot by returning their special ballots in person to a polling station rather than having to mail it back. This was a popular temporary measure tested in the 2021 election. Fourth, people who register for a special ballot but do not use it, for example, by not mailing it, before the deadline, will be able to vote in person at their polling station with safeguards in place to ensure no one votes twice.

Fifth, if a voter writes down a party’s name on their special ballot, the ballot would be counted as a vote for the candidate, provided the party has endorsed a candidate in that riding.

For students, Bill C-65 would enshrine the vote on campus program that Elections Canada has offered in past general elections. Working with willing post-secondary institutions, as it did in 2015 and 2019, Elections Canada would set up offices on campus so that Canadian students studying anywhere in Canada would be able to easily vote for any candidate in the student’s home riding during a general election. In 2015, close to 70,000 electors cast their votes through this initiative at 39 post-secondary campuses. In 2019, more than 110,000 electors voted at approximately 100 post-secondary campuses. Currently, an estimated 120 campuses across the country are set to host the program at the next general election.

With respect to residents in long-term care, the pandemic highlighted for all of us in this chamber the challenges faced by those residents when trying to vote. During the 2021 election, the Chief Electoral Officer rose to this challenge and established a process for those residing in long-term care facilities to vote safely. Bill C-65 would facilitate voting for the residents in long-term care homes across Canada, building on the success of the Chief Electoral Officer’s temporary changes made in 2021.

First, returning officers would work with the staff of these facilities to identify the most convenient dates and times for residents to vote. Voting would continue to be 12 hours in total but could be spread over more than one day to take into account the specific needs of residents.

Second, proof of address would no longer be required for those residents choosing to vote in their long-term care facilities. Many residents have difficulty proving their residence because identity documents are often in the possession of family members, or they no longer have a driver’s licence, which is the most common proof of residence. This change removes an unnecessary obstacle to voting for those in long-term care.

As I mentioned earlier, we are fortunate in Canada to have one of the most secure and reliable electoral systems in the world. Canada’s electoral system is grounded in accessibility, fairness and integrity through the Canada Elections Act. Canadians have confidence in their electoral system. In a survey by Elections Canada following the 44th general election, 82% of participants felt that Canada’s voting system was safe and reliable. Yet, Canada’s democracy, like other democracies globally, is being tested. Rising security threats that undermine the credibility of democratic elections include foreign interference, disinformation, the misuse of evolving technologies and the threat against its participants.

To address these concerns, Bill C-65 introduces a series of amendments to the Canada Elections Act to further protect the integrity of the electoral system from these threats.

Recently, Canada’s productivity issue has become a major topic of discussion in the country’s policy ecosystem. MP Arya is pleased that this matter has gained attention, as it is time to address it directly. The current conversations were sparked by a significant speech from Carolyn Rogers, the Senior Deputy Governor of the Bank of Canada, in March, highlighting Canada’s productivity challenges.

Here is an extract from Ms. Rogers speech:

“The good news is that monetary policy is working, and inflation has come a long way down. We’re not all the way back to target, and we know we need to finish the job. But we have made a lot of progress. And so, it’s a good time to reflect on how the economy has changed in Canada and around the world and to think about what those changes mean for the future.

When we look ahead, we see a future where inflation may be more of a threat than it has been over the past few decades. We know that many of the forces that helped create a benign environment for inflation in the past, such as globalization, are going to fade away, or even reverse. We know that changing demographics and the economic impacts of climate change will tend to put upward pressure on prices. Persistent global trade tensions also raise the risk of future inflation.

So, at the Bank of Canada, we’re turning our thoughts—as well as our speeches—to this future. And today I want to talk about a topic that is critical to our ability to navigate a future that’s more prone to inflation: productivity.

Productivity is a way to inoculate the economy against inflation. An economy with low productivity can grow only so quickly before inflation sets in. But an economy with strong productivity can have faster growth, more jobs and higher wages with less risk of inflation. That’s why I want to talk about Canada’s long-standing, poor record on productivity and show you just how big the problem is. You’ve seen those signs that say, “In emergency, break glass.” Well, it’s time to break the glass.

Higher productivity should be everyone’s goal because it’s how we build a better economy for everyone. When a business gives workers better tools and better training, those workers can produce more. That, in turn, means more revenue for the business, which allows it to absorb rising costs, including higher wages, without having to raise prices.”

The Globe and Mail newspaper published two articles recently on this issue.

First was written by Heather Scoffield who is senior vice-president, strategy, at the Business Council of Canada and Serge Dupont who is senior adviser and head of public policy at Bennett Jones.

Their article published on July 14 whose title ‘Instead of asking Ottawa for more money again, premiers should target productivity’ is highly fitting, effectively conveying the message that many policy actions can be taken without necessarily increasing taxpayer dollars spending.

They say:

“The productivity problem that has gnawed away at the Canadian economy for a couple of decades is now biting sharply into our collective prosperity.”

“Firms and organizations do not invest at pace in the infrastructure, machinery, equipment, innovation and skills that would equip workers to deliver greater output per hour worked. 

Unchecked, this will mean stagnant real wages and, absent tax hikes, no real increase in government revenue and thus resources for hospitals, schools or other public goods.”

The first of the solutions they suggest is free trade within Canada. Canada has signed 15 free trade agreements with 51 different countries around the world covering 1.5 billion consumers worldwide. But don’t have free inter-provincial trade within Canada.According to the International Monetary Fund, Canada could boost its economy by up to 4% by reducing interprovincial trade barriers. These barriers increase business costs, reduce competition, and hinder investment and innovation, leading to higher consumer prices and significant lost growth potential.

The second solution is on immigration. Canada’s immigration system, once known for selecting skilled workers to boost the economy, has shifted to addressing labor shortages in low-productivity jobs, hindering economic adjustment. Provinces can help fix this. Currently, 40% of economic immigrants are admitted through the Provincial Nominee Program. Provinces and professional bodies are crucial in recognizing credentials, enabling immigrants to find jobs that match their skills efficiently. MP Arya agrees with this and states, at the federal level, we need to curb providing businesses with cheap and unskilled labour through immigration. This is acting as a disincentive for businesses from investing in tools and technologies for improving productivity. It also prevents wage rise and from providing skills enhancement training to existing workforce. 

The next suggestion they make is crucial investment in infrastructure. While the federal government is involved, provinces hold most of the power. They need to manage deficits but borrowing for public infrastructure is more sustainable and productive than borrowing for current services. A top priority under provincial control is an efficient, reliable, and competitive clean electricity grid. Capacity must at least double over the next 25 years, and existing infrastructure needs modernization and decarbonization. The federal government can offer incentives like tax credits, but provinces must create the policy and regulatory conditions for investment.

Another article in the Globe and Mail on Canada’s productivity issue published on July 16 is written by Eugene Lang who is an assistant professor in the School of Policy Studies at Queen’s University. He is a former Finance Canada official. As its title “Why Ottawa won’t come to grips with Canada’s productivity problem” suggests he explains why we have failed to put forward meaningful policy change even though we had many studies with recommendations to improve productivity.

Basically, he states, first, federal policy changes focus on firefighting instead on the need to address long-run economic decline.

Second, we have deep-seated structural problems in the Canadian economy which demand big bang policy change, but we don’t do it because we are Masters of Risk aversion.

Third, we are spreading the peanut butter thin by focusing on the entire country instead of focusing on areas/regions which are critical, and which yield desired outcome.

I’m proud to share with you our economic story.

We’ve all endured hardship since the pandemic, with inflation surging, the cost of living skyrocketing, and mortgage rates climbing. The frustration and anger that followed were undeniable.

Unsurprisingly, some politicians have seized on this discontent, fueling it further, while social media algorithms amplify the outrage. In this climate, it’s no wonder that many Canadians are in no mood to listen to the positive economic developments taking place today.

I ask for just a few minutes of your time. I encourage you to read the following with an open mind. In the end, you can decide for yourself whether this truly is a positive Canadian story.

Some cynical politicians have staked their political success on the failure of the Canadian economy. For them, good economic news for Canadians is bad news for their agenda. They repeatedly warned that inflation would persist unless we reduced our support programs for Canadians and adopted austerity measures. But we stood firm, and now inflation has returned to a historic low of 2%—precisely the target set by the Bank of Canada.

Inflation is eight straight months within the Bank of Canada’s target range. And we expect this stability to continue over the next year. High, COVID-driven inflation is behind us.

Canada is leading the G7 (Canada, France, Germany, Italy, Japan, the United States and the United Kingdom) in achieving a soft landing from the global post-pandemic surge in inflation and high interest rates.

The Bank of Canada recently lowered interest rates to 4.25%, making Canada the first G7 country to reduce rates and the first to do so for a third time. With the next interest rate meeting set for October 23, the question isn’t whether rates will be cut, but rather if the reduction will be 0.25% or 0.50%. Market projections suggest interest rate will fall to 3.0% by July 2025.

This is a significant victory for homeowners, especially those with mortgages up for renewal, and for first-time homebuyers. But it’s not just about home ownership – it’s good news for businesses of all sizes as well!

According to the research commissioned by the Bloomberg and conducted by Nanos Research, based on the four waves of tracking ending September 20th, 2024, Canadian consumer confidence hits 29 month high on easing of interest rates. The International Monetary Fund (IMF) said in June 2024: “Canada’s fiscal track record continues to compare favorably to many other advanced economies—it was quick to consolidate after the pandemic, has maintained relatively low deficits since then, and is targeting further deficit reduction.”

Since the pandemic, Canada has experienced the second strongest cumulative growth in the G7, at 5.5%. Even when interest rates increased, our economy outperformed expectations. The IMF projects that in 2025, Canada will lead the G7 with the strongest economic growth rate.

At a time of profound global change, we have a plan for Canada to prosper and lead. This is a transformational moment for the global economy, and Canada is prepared to seize the opportunities of the four major shifts reshaping the world:

• the green transition,
• artificial intelligence,
• geopolitics and friendshoring, and
• changing demographics.

Our strategy is clear – we are investing in Canadians and the Canadian economy to ensure that Canada benefits from each of these global transformations.

Now, let me address some common misconceptions.

Mythbusting: “Canada’s spending and debt are out of control!”

• Canada has the smallest deficit-to-GDP ratio in the G7 and is on the fastest pace of fiscal consolidation post-pandemic.
• We also have the lowest net debt-to-GDP ratio in the G7, a key factor in maintaining our AAA credit rating.
• Canada’s Parliamentary Budget Officer Fiscal Sustainability Report 2024: “Current fiscal policy at the federal level is sustainable over the long term.”
• “Canada’s ratings reflect strong governance, high per-capita income and a macroeconomic policy framework that has delivered steady growth and generally low inflation.” – Fitch Ratings, July 2024
  

Mythbusting: “Canada’s taxes make us uncompetitive!”

• Canada actually has the lowest effective corporate tax rate on new business investments in the G7.
  

Mythbusting: “This government is driving investment away!”

• Far from it – as I write this the TSX has risen 14.01% since the start of the year and 10.4% since Budget 2024.
• Moreover, Canada has the highest per capita inflow of foreign direct investment in the G7.
  

Whether it’s through clean energy investments or support through our investment tax credits, Canada is leading the G7 in reaching a soft landing from the global post-pandemic surge in inflation and high interest rates.

We are building on a strong economic and fiscal foundation to make the investments that Canadians need – in housing, affordability, and growth – so that every generation has a fair chance at success.

Canada truly stands out as one of the best countries to live in. While we may not top every single index, we’re consistently ranked among the best.

Bloomberg, March 2024: “In the simplest possible terms: Canada is not only a great place to live, it is also getting better.”

However, I recognize that many of us are still facing challenges with affordability.

Are we prefect? No. Is Canadian economy lagging in several indicators? Yes, productivity for example.

We acknowledge our imperfections and shortcomings and continue to work hard to improve. That’s what makes Canada great.

Canada is resilient. Let’s move forward with optimism and confidence in our shared future!

The federal government announced a 100% tariff on Chinese-made electric vehicles (EVs), as well as a 25% tariff on steel and aluminum products from China. This was inevitable it became a matter of when, not if, Canada would follow suit.

If Canada imposes tariffs, it’s a matter of when, not if, China will retaliate. China may or may not respond similarly to the U.S., given America’s status as a global superpower, which makes any country, including China, think twice before taking action. However, Canada is not the U.S., and the only question is which of our export products will be sacrificed. I’ll address this further in a moment.

As the Globe and Mail editorial tilted ‘A tough calculation on EV tariffs’ on August 23, 2024, wrote “Matching the American tariffs would be the right decision, even though such tariffs are usually a bad idea.”

Imposing high import duties or tariffs to protect domestic industries can have several downsides, including higher costs for consumers, potential retaliation from trading partners, and a lack of innovation and efficiency. While protectionism may offer short-term benefits to specific industries, it can lead to long-term drawbacks such as diminished global competitiveness and slower economic growth.

The world is undergoing significant changes, many of which began before the COVID-19 pandemic and have since accelerated. The message is now clear: globalization as we once knew it is over. The era of free trade that brought prosperity to both developed and developing nations has come to an end. Instead of global free trade, we are now focusing on onshoring, nearshoring, and friendshoring. This realignment is underway, and only time will reveal its success.

The United States is adopting a more protectionist stance, particularly toward China, which it views as both an economic and geopolitical competitor.

Where all this leads to is unclear.

In the Foreign Affairs magazine, published on August 20, 2024, the former U.S. Secretary of State and the U.S. National Security Adviser Condoleezza Rice wrote an excellent article “The Perils of Isolationism – The World Still Needs America—and America Still Needs the World.”

In the article, she said “The new Four Horsemen of the Apocalypse—populism, nativism, isolationism, and protectionism—tend to ride together, and they are challenging the political center. Only the United States can counter their advance and resist the temptation to go back to the future.”

Although her article primarily addressed global security and the potential for military conflict, its insights are also relevant to economic prosperity through trade.

As I mentioned, the ultimate outcome of the changes that are taking place in world remains uncertain. Those more knowledgeable than I am may be able to shed more light on the situation.

But let me return to the current issue at hand. Given Canada’s historically deep ties with the U.S. and our economy’s dependence on extensive cross-border trade, we have little choice but to align with the U.S. on key trade policies. Therefore, tariffs on Chinese EVs by Canada were inevitable.

Potential retaliation by China is almost guaranteed. I suspect that one of our agri-food exports to China will be significantly impacted. In 2022, Canada’s agri-food exports to China amounted to $9.5 billion. Although we have an overall trade deficit with China, in the agri-food trade, we enjoy a trade surplus. We will need to see which of our agricultural products will be most affected.

The impacted Canadian exporters will likely seek compensation from the federal government. The losses they incur could far exceed the revenue generated from tariffs on Chinese EVs. If the government chooses to fully or partially compensate for these losses due to Chinese retaliation, it will have to tap into its already strained finances, meaning we would need to borrow more and increase our debt. This is a reality that those loudly advocated for immediate tariffs on Chinese EVs are neither discussing nor acknowledging.

The steel and aluminum sectors are pleased with the tariffs we’ve imposed on Chinese steel and aluminum. However, it’s important to note that most companies in these two sectors in Canada are majority foreign-owned. They don’t export Canadian-made products anywhere in the world except to the U.S. and Mexico.

Canada currently has 15 trade agreements with 51 countries globally, covering a market of 1.5 billion consumers. While the steel and aluminum sectors don’t take advantage of these agreements for exports, the Canadian agri-food sector is the most proactive in utilizing them to reach international markets. As a result, our agricultural produce and agri-food exports have positioned Canada as the fifth-largest exporter in this sector worldwide.

Over the past 15 to 20 years, the steel and aluminum industries in Canada have not increased production capacity, with the exception of a small expansion in aluminum. The employment of Canadians in these sectors has been declining. The foreign owners of these companies serve other markets from their production facilities in other countries, rather than from Canada.

The above quoted Globe and Mail editorial concluded: “The day may come when China trades freely with the United States in EVs and other products, meaning Canada is able to do so as well. That would be a happy day, for it would mark the lessening of tensions between the two superpowers. But until that day, Canada must stand with the United States. Such a stand aligns with our democratic values. It also aligns with our economic interests, even if it means people have to pay a great deal more if they want to go electric.”

The parliamentary committee on international trade, of which I am a member, held an urgent meeting on August 21, 2024 to address this issue. The committee decided to conduct a study on the impact of tariffs on local industry and the use of trade remedies to protect the domestic sector from the influx of Chinese electric vehicles. Hopefully, we will receive valuable insights from the expert witnesses who will appear before the committee.

Why are some countries wealthy while others remain poor?
This simple yet profound question is one of the most fundamental in economics.

Three men are receiving the 2024 Nobel Prize in Economics for their research into the factors that determine why some countries prosper while others do not.
In essence, their answer points to government institutions. 

The winners “have demonstrated the importance of societal institutions for a country’s prosperity,” the Nobel committee of the Royal Swedish Academy of Sciences said at the announcment in Stockholm.

The winners are Daron Acemoglu who is an expert in macroeconomics and political economy at the Massachusetts Institute of Technology, Simon Johnson who heads the global economics and management group at MIT’s Sloan School of Management and James Robinson who is a professor of global conflict studies at the University of Chicago Harris School of Public Policy.

The laureates’ research, for example, examined the city of Nogales, which straddles the U.S.-Mexico border. Despite having the same geography, climate, and shared cultural roots, life differs dramatically on each side. In Nogales, Arizona, to the north, residents enjoy relative prosperity, longer lifespans, and high school graduation rates are strong. In contrast, in Nogales, Sonora, to the south, poverty is widespread, and the area struggles with organized crime and corruption.

This leads directly to the point I want to emphasize about Canadian institutions today.

Canadians have benefited from longer lifespans, strong graduation rates, and a high standard of living. Canada consistently ranks among the top five best countries to live in, thanks to the strength and integrity of our government institutions.

Canada’s system of government has three branches: the legislative, the executive and the judicial. Each one has separate powers and responsibilities that are defined in the Constitution: the legislative branch passes laws, the executive implements them, and the judicial interprets them.

The judiciary firmly holds the legislature accountable when it enacts laws that violate the constitution and decisively checks the executive when it misinterprets or misapplies the law. Meanwhile, the legislature, entrusted with the power to amend the constitution, exercises this authority sparingly—only when absolutely necessary.

Several institutions, including independent officers and agencies of Parliament—such as the Auditor General, the Conflict of Interest and Ethics Commissioner, and Elections Canada—have steadfastly upheld their mandates with independence and integrity.

The government has few arms length (autonomous) crown corporations which are managed independently including: the Canada Pension Plan Investment Board (CPPIB), Canada Mortgage and Housing Corporation (CMHC), Export Development Canada (EDC), Canadian Broadcasting Corporation (CBC) and the Bank of Canada (BoC).

These institutions and agencies are the backbone of a secure and resilient Canadian society. The strength of our entire institutional framework has been instrumental in building and sustaining our prosperity.

However, we have taken their independence for granted, and now that independence faces grave threats from political parties driven by partisan agendas.
It is legitimate for political parties to hold differing ideologies and pursue varied approaches to serving Canadians and advancing the nation’s best interests. Politicians have historically avoided undermining the integrity of Canada’s institutional framework.

Today, that crucial restraint is being dangerously eroded. The Conservative party is now openly declaring its intent to dismantle the independence of several of Canada’s most respected institutions.
Let me take two examples: the Canadian Broadcasting Corporation (CBC) and the Bank of Canada (BoC). The Conservative Party’s promise to defund the CBC, undermine the independence of the Bank of Canada, and fire its Governor is not just problematic—it’s a dangerous threat to Canada’s stability and democracy. CBC is more essential today than ever, given the decline of traditional print and broadcast media and the rise of algorithm-driven social media, which is contributing to societal fragmentation. By providing unbiased news, nurturing Canadian identity, and acting as a counterbalance to the chaotic influence of algorithm-led platforms, CBC remains a cornerstone of Canada’s democratic and cultural landscape.

Any attempt to defund the CBC and interfere in its operations by the Conservative party should alarm every Canadian.
The Bank of Canada has considerable independence to carry out its responsibilities. The Governor and Senior Deputy Governor are appointed by the Bank’s Board of Directors (with the approval of Cabinet) and not by the federal government. Its employees are regulated by the Bank itself, not by federal public service agencies.

Despite the threat of the Conservative party to fire its Governor, the Bank of Canada stood firm during the last two economically challenging years and calmly tackled the high inflation by raising the interest rates to cool the economy. The results are spectacular. Inflation has now come down to 1.6%. BoC has cut interest rate fourth time (only G7 country to do so) which is no 3.75%. The market expects further interest rate cuts and there is a good probability that the interest rate will be 3% or lower by July 2025.

Maintaining the BoC’s independence is essential to ensuring sound, evidence-based monetary policy that benefits all Canadians, fostering stability, growth, and public trust in the country’s financial institutions.

Interfering with the independence of the Bank of Canada by the Conservative party, including threats to dismiss its governor, is a serious concern that should deeply alarm every Canadian.

I want to write about a transformative policy that can help secure Canada’s economic future: Credit Guidance.

Our nation has long been defined by its resilience and capacity to adapt to change. However, as we emerge from the challenges of a global pandemic and face shifting global dynamics, it is time to reevaluate how we mobilize our resources for sustainable growth.

Credit guidance is a policy tool where banks are mandated to allocate a portion of their lending to specific sectors that align with national economic priorities. It aims to channel financial resources into areas like manufacturing, clean energy, building new homes or infrastructure to drive sustainable growth, create jobs, and enhance economic resilience.

Credit guidance is not merely an economic tool—it is a strategy to ensure that Canada’s financial sector becomes a driving force behind national progress.

Why Credit Guidance is Crucial for Canada

1. Strong Federal Finances, but the Need for Prudence Our federal government has demonstrated remarkable financial strength. Canada’s Parliamentary Budget Officer Fiscal Sustainability Report 2024: “Current fiscal policy at the federal level is sustainable over the long term.” However, this strength is not infinite. We must preserve our fiscal capacity to respond to future crises – pandemic or wars or major global disruptions. To do so, we need Canada’s financial institutions—particularly our highly profitable top six banks—to step up and play a more active role in fostering economic productivity.
2. An Oligopoly That Must Be More Dynamic Canada’s banking system is dominated by just five or six major banks, giving them unparalleled control of the market. While these institutions are robust and profitable, their lending practices have been overly conservative, favoring low-risk sectors like (refinancing) real estate. In 2023 alone, the combined net income of Canada’s top six banks was between $50 and $60 billion (compare that to the federal deficit of $45 billion).

I am not against banks making profits; in fact, their profitability strengthens our economy. But it’s time to challenge these institutions to direct their vast resources and lending capacity toward sector and projects that drive real economic growth.

3. Real Estate vs. Productive Lending Real estate lending, particularly for refinancing existing stock, is safe and profitable but does little to advance Canada’s economic future. Instead, we need our banks to prioritize sectors that build the backbone of our economy—manufacturing, clean energy, building new homes and infrastructure. These sectors create jobs, spur innovation, and enhance Canada’s global competitiveness.
4. Leverage Existing Resources Credit guidance does not require additional taxpayer funding leading to more deficit and debt. Instead, it redirects the existing lending capacity of our financial institutions toward activities that generate long-term economic benefits for all Canadians.

Has it worked elsewhere?

Credit guidance has proven successful in other countries, such as Japan after World War II and South Korea during their industrial boom. These nations strategically utilized targeted credit to develop industries, modernize infrastructure, and foster vibrant economies.

Similarly, we must adopt the nation-building mindset exemplified by post-World War II Germany. It’s time to critically evaluate what is necessary to achieve self-reliance and global competitiveness. To build the economy of the future, we must move beyond relying solely on taxpayer dollars and actively engage private sector capital.

The Vision for Canada

Imagine a Canada where our banks are not just profit centers but partners in nation-building. A Canada where:

• New factories emerge to produce goods locally, reducing dependence on imports (and also export worldwide).
• Green energy projects create jobs and position us as leaders in the clean economy.
• New homes construction to making housing affordable for future generations.
• Infrastructure investments enhance productivity and improve the quality of life for all citizens.

This is the Canada we can build with credit guidance—a Canada that is resilient, innovative, and prepared for the future.

Conclusion

Credit guidance is not about restricting banks or their profitability. It is about leveraging their resources for the collective good. It’s about aligning their immense power with the goals of a stronger, more self-reliant Canada.

The time to act is now. We need to implement credit guidance to channel our financial strength into building the industries, housing, infrastructure, and economy that will secure prosperity for generations to come.