Independent think-tank the Fraser Institute has said Ottawa “could balance its budget in one or two years” if Prime Minister Justin Trudeau’s government could practice “modest spending restraint.”Trudeau in 2014 notoriously claimed "the budget will balance itself." .A new study released by the Fraser Institute Tuesday concluded the concept of balancing the federal budget is not as far-gone as people may think — it could be done by 2026/27 if the Liberals put in the effort. “There are a few different options the federal government could take to balance the budget over the short-term depending on the degree to which they’re willing to show restraint in the growth in spending,” said Jake Fuss, director of Fiscal Studies at the Fraser Institute and co-author of A Case for Spending Restraint: How the Federal Government Can Balance the Budget.The study examined ways Ottawa could feasibly balance the budget, and found it is “indeed possible within just one or two years with modest spending restraint.”.If the Liberals were to slow growth in nominal program spending 0.3%, the inflated budget would balance by 2026/27 and if Trudeau’s government reduced nominal spending 4.3%, the budget would be balanced by next year (2025/26).Fraser Institute noted before the COVID-19 pandemic, “federal spending increased faster than population and inflation” spending increases that have led to “a string of large budget deficits” tallying up to an “estimated $941.9 billion increase in gross federal debt from 2014/15 to 2023/24.”“This accumulation of debt, along with recent hikes in interest rates, has raised the cost of interest on the federal debt to one of the largest budget expense items,” said Fuss. “The federal government should prioritize balancing the budget so taxpayers aren’t saddled with future tax increases to pay ever-increasing interest on federal debt, there are options — now it’s just a question of whether they have the good sense to use them.”
