Thank you, Mr. Chair.

Canada's economy today stands at a crossroads. For the last quarter for which we have data, our GDP actually contracted. Inflation just clocked in at 4%, which is still well above the Bank of Canada's target. More rate increases, therefore, could be on the horizon.

Households in Canada have among the highest debt of any G7 country. Coupled with high house prices and insufficient new housing, many middle-class families can no longer afford to own a home, and many are fearful they won't be able to afford the monthly payments on homes they already own as rates keep ticking up and staying high.

There is a homelessness and drugs crisis on our streets making people feel unsafe. You only have to walk about five minutes from here to see that for yourself.

Meanwhile, the government's massive fiscal stimulus has reaped mixed dividends at best. A recent Fraser Institute study shows that most of the job creation in Canada since the pandemic has been in the public sector, not the private sector. In other words, not only is our economy becoming more socialized, but we haven't created enough new good jobs and new business to power growth into the future. In fact, Canada is probably at present the worst performer in the G7 after Germany.

I warned as long ago as the fall of 2021 in the National Post and before this committee about a year ago that the Bank of Canada needed to get serious about inflation. It was not transitory and supply shocks and Ukraine. The bank, in my judgment, began acting too late, and the problem has gotten worse. It now has to be more aggressive to fix the problem, which is making life more difficult for all of us who owe money—that's most of us—while profiting only the wealthy, who have spare cash to invest.

Where do we go from here? There's a real danger we will fall back into stagflation. That is stagnation in the economy and high inflation. We saw this movie before in the 1970s and again in Canada in the 1980s, and we know it doesn't end well, as we saw with wage and price controls at that time.

We seem to have forgotten the important lessons that were painfully learned. The recipe for success is prudent fiscal policy, sound money and sensible regulation that protects consumers while not stifling business in red tape. That is the formula we used in Canada to right the ship under governments of different parties.

In Canada now, we have the opposite situation. Profligate government spending, the long-lasting, harmful effects of loose money and stifling regulation are giving us low growth, high inflation and a “doing business” environment that chokes new business creation and gives us low growth compared to our G7 peer group. This means that prospects for many young people coming into the workforce or looking to start a business are increasingly dim.

In thinking about the next budget, my suggestion to the committee is to look at the things we did right that gave us a booming economy, and what is wrong now. We need a combination of sensible tax cuts and spending cuts that help us balance the government's books in a prudent manner while lifting the burden on average Canadians. We need to hold the Bank of Canada accountable for its mandate to protect the value of our currency and not allow loose, irresponsible monetary policies that have created our present inflation and affordability crisis. Finally, we need to pare back excessive government interference in the economy, which kills entrepreneurship and holds the economy back.

Thank you, Mr. Chair.

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