Political scientist Tom Flanagan says another minority government propped up by the NDP might dig Canada’s debt hole faster than a Liberal majority..Conservative Leader Erin O’Toole has renewed his pledge to balance the budget within a decade but hat will be hard to do, Flanagan told the Western Standard..“Indigenous spending, the envelope has more than doubled in six years since Trudeau came to power from less than $12 billion a year to $24 billion. That sort of structural change is across the whole realm of government,” Flanagan said in an interview..The spring federal budget introduced over $100 billion in new spending. The Parliamentary Budget Officer estimates Canadians will spend another $3.8 trillion to service federal debt until the next balanced budget in 2070..“Based on history, I would expect some large scale borrowing to continue even with the Conservatives. It should be better, it could be worse, but that kind of borrowing might decline a little bit,” he said..“It might even be better if the Liberals got a majority government because you wouldn’t have to have the NDP in. But no matter who’s in power, minority or majority, Liberals or Conservatives, now that our deficit has become so large, I would expect it to continue for the foreseeable future because when you have created all this spending on these programs, how do you cut that off?.“It’s not really a battle of ideas, it’s a battle of power. Governments only stop overspending when the concept starts to hurt.”.In 1993, the University of Calgary academic worked with Stephen Harper to draw up the Reform Party plan for zero spending increases over three years to restore balanced budgets. The Chretien Liberals eventually took a similar approach, partly through reducing provincial transfers..“When I look at the history of provincial governments in Canada, the party has actually nothing to do with it (balanced budgets.) The Conservative Party, Liberal Party, the NDP at different times – you’ll find examples of all of them spending recklessly and all of them responsibly to bring things under control, but it all depends on the circumstances,” he said..“Saskatchewan for example, it was Romanow’s government and McKinnon who dealt with their deficit after the Conservatives (created deep debts). Here in Alberta, the Conservative government wasted an awful lot of money..“The essential lesson of history as I can see it is that parties of any stripe don’t start to deal with it until there’s a crisis. It happened in New Zealand, which started the modern round of tightening belts in the 1980s and it spread to other countries..“But again, it started out of a crisis. So that’s my rather gloomy prognostication, that we probably won’t be an effective move on spending control until there’s some sort of fiscal crisis because it’s just so pleasant for politicians to be able to go wild with money and create programs to buy votes.”.The PBO Fiscal Sustainability Report said the federal government could increase spending by another $18 billion to stabilize the debt-to-GDP ratio at 37.7%..The report said only Quebec, Nova Scotia, and Ontario had room to increase spending or lower taxes, while other provinces face ever-worsening debt-to-GDP. Without changes, Alberta, Saskatchewan, and Manitoba will contribute most to this subnational fiscal gap..“There does come a point where it challenges the trust in your government in its ability to borrow,” Flanagan said, at which point a currency devaluation or financial crisis can take hold..Lee Harding is a Western Standard correspondent living in Saskatchewan.
