The Canadian Taxpayers Federation (CTF) released its 2023-24 federal pre-budget submission on Wednesday, showing how the Canadian government can balance its budget..“The feds could balance the budget next year by returning to pre-pandemic spending, which was already at all-time highs,” said Franco Terrazzano, federal director of the CTF..“The numbers show it’s possible to balance the budget and provide tax relief with modest spending restraint.”.The report said while it appears on the surface COVID-19 is driving the government's "deteriorating" financial position, there are other factors at play. $200 billion of that new spending is not related to COVID-19, according to the Parliamentary Budget Officer, while a recent Fraser Institute report found 40% of the pandemic deficits were not related to the pandemic..The CTF's analysis showed the federal government won't be able to balance its budget until 2041. But that's assuming there is 4% nominal GDP growth per year, annual interest rates remain at 2.5%, and no new spending announcements are made beyond what is included in Budget 2022..But even if the federal government does manage to finally balance the budget in 2041, interest charges on the government's "credit card" will have cost taxpayers $802 billion, totaling $18,000 for every Canadian.."One of the main problems with never-ending deficits is precisely the more the government borrows, the more interest taxpayers are forced to pay instead of that money being used to improve government services and lower taxes," the report reads..To remedy this, the report recommends the federal government bring program spending back to the pre-pandemic and all-time high levels of 2018-19, adjusted upward for inflation and population growth. .Chief among those recommendations is giving Canadians much-needed tax relief. While a recent Ipsos poll found 72% of Canadians say they pay too much in taxes, the federal government increased gas, payroll and alcohol taxes during the pandemic..Meanwhile, the CTF identified 51 other governments around the world that provided tax relief or to ease the burdens of inflation..The CTF says the government should reverse all pandemic tax hikes, including the alcohol tax, payroll taxes, and scrap the carbon tax. Additionally, it should reject future tax hikes, such as those for home equity, wealth, excess profits, luxury, fat, sugar, and meat..More than $40 billion in annual savings is identified in the report, while an additional $41 billion in one-time savings were found..The CTF said the three pay raises MPs and the governor general received during the pandemic should be reversed, and their salaries should be returned to pre-pandemic levels. The Senate should also be forced to reign in its spending..More than $38 billion corporate welfare subsidies, including direct cash subsidies, niche tax credits, loans and loan guarantees, should also be cancelled and returned to taxpayers. Furthermore, federal subsidies to businesses through Crown corporations and regional development agencies should be scrapped..The CTF also recommends cutting government funding to each Crown corporation by 25%, saving taxpayers $2.1 billion annually.."While there may be arguments against reducing each Crown corporation’s budget by the same amount, the CTF is advocating for this overall level of savings to be found in annual aggregate appropriations to the government’s Crown corporation," the report reads..The report claims that one of the most controversial Crown corporations, the CBC, should be defunded completely. This would save taxpayers nearly $1.4 billion annually..Equalization payments should also be on the chopping block, as the CTF claims it encourages poor governance in the recipient provinces, places stress federal finances, and is "fundamentally unfit to reach its stated policy objective." .Under the CTF's plan, equalization would be fully phased out over a 20-year period, with the annual size of the program declining by 10% per year. Funding for "have-not" provinces would be predicated on keeping deficits, taxes and inflation low. This would provide taxpayers with average annual savings of more than $10 billion..The federal government's firearms buyback program, which the CTF says will become a "taxpayer boondoggle" that ultimately won't reduce gun crime. Instead of spending $756 million on reimbursing legal gun owners, the CTF recommends hiring 1,200 new officers for five years.."Canadians are paying too much tax because the government wastes too much money,” said Terrazzano..“A balanced budget means less debt for Canadian kids and grandkids to pay back, less money wasted on interest charges, and room to cut taxes.”
