Finance Minister Chrystia Freeland has increased the approved federal borrowing limit by $73 billion, for a total of $517 billion this fiscal year.
According to a report from government watchdog Blacklock’s Reporter, Freeland, through Cabinet, has granted herself authority to make the increase under the Financial Administration Act.
On February 15, Freeland set “$517 billion to be the maximum aggregate principal amount of money that may be borrowed” before April 1. The previous figure was $444 billion. No reason was given.
Under the Borrowing Authority Act, in 2021 the Trudeau Liberals raised the federal debt ceiling 56% from $1.168 trillion to $1.831 trillion.
Freeland has not specified any plans to balance the federal budget. Prime Minister Justin Trudeau has previously said, “the budget will balance itself.” The budget was last balanced in 2007.
“The increase in the borrowing authority is in no way a blank cheque,” Freeland earlier testified at the Commons finance committee. “Every single expenditure by the government needs to be authorized by Parliament.”
“What it does is set a ceiling for how much the government can spend,” Freeland continued. “We are saying this is the upper limit to which the government may borrow, but we are not saying the government will undertake those borrowings, nor are we saying anything about government spending.”
Conservative MP Ed Fast rebutted, “You’re simply saying, ‘Give me a blank cheque and then trust me.’”
“The characterization of the borrowing authority limit as a blank cheque is simply false,” replied Freeland. “This is a transparent and open authorization of a level up to which the government may borrow.”
“There are no blank cheques and there are no free lunches,” Freeland told MPs. “Our fiscally expansive approach to fighting the coronavirus cannot and will not be infinite.”
“Is there a dollar figure to which she would limit the debt?” asked Conservative Leader Pierre Poilievre.
“We are mindful that limits exist,” replied Freeland.
Budget Officer Yves Giroux in February 13 testimony at the Senate National Finance Committee said Cabinet’s plans were unclear. “We will have to see,” said Giroux.
“Is that borrowing limit still realistic?” asked Senator Elizabeth Marshall.
“We don’t know exactly what the government plans on spending or doing in terms of new spending or potential spending,” replied Budget Officer Giroux.
“But as it stands now, do you think it looks reasonable?” asked Senator Marshall.
“It looks sufficient but the government always wants to give itself some room to maneuver in case there are unforeseen events that require borrowing on short notice,” replied Giroux.
