The ongoing deficits by the federal government make future tax hikes a certainty, the Commons finance committee was told..Blacklock’s Reporter said the finance department projects deficits will total two-thirds of a trillion by 2025..“The federal government’s current reliance on borrowing rather than taxation to fund its programs is unprecedented,” testified William Robson, CEO of the C.D. Howe Institute..“That means the apparent cost of federal programs to taxpayers is unprecedentedly low. This situation will not last.”.Robson predicted a “sharp increase in the tax costs of federal programs that is inevitable over the next four to five years.”.“How important is it for the federal government to actually get the revenue side right?” asked New Democrat MP Peter Julian (New Westminster-Burnaby, B.C.)..“We’re not going to sustain programs that we’re talking about unless there is something done on the revenue side,” replied Robson..Prime Minister Justin Trudeau last September 24 said once the pandemic he would cut spending..“Absolutely, once we are through this pandemic, it is going to be extremely important to be fiscally responsible and sustainable,” said Trudeau..Robson on Thursday told the finance committee, taxes currently fund less than half the true cost of federal programs with the balance paid through debt..“You’re not doing anyone any favours by pretending you can have these things for fifty cents on the dollar,” said Robson..“The tax cost of a program dollar was 46 cents. The federal government borrowed more than half of every program dollar it spent. That is unprecedented..“Easy credit undermines good decision-making. We prevent people using credit cards to buy lottery tickets for a reason.”.A bill currently before the Commons would raise the federal debt ceiling 56 percent under the Borrowing Authority Act, from $1.168 trillion to $1.831 trillion. It is the largest debt in Canadian history..“The hundreds of billions or trillions of dollars that we’re now talking about in programs and debt are a bit hard to grasp,” said Robson..“Those numbers are astonishing, as is the fact this is projected to cover borrowings only until March 31, 2024, about three years from now..“Those of us who remember the federal government’s fiscal problems of the 1980s and 1990s get little comfort from assertions that borrowing on this scale is not a problem,” said Robson..The finance department has projected ongoing deficits will total $652.6 billion including $381.6 billion last year, another $121.2 billion this year, $50.7 billion in 2022, $43.3 billion in 2023, $30.9 billion in 2024 and $24.9 billion in 2025..“Looking forward, if we don’t deal with public finance we do risk doing exactly what the governments of the 1970s did, putting the future generations at risk,” said Conservative MP Pat Kelly (Calgary Rocky Ridge)..Dave Naylor is the News Editor of the Western Standard.dnaylor@westernstandardonline.com.TWITTER: Twitter.com/nobby7694
The ongoing deficits by the federal government make future tax hikes a certainty, the Commons finance committee was told..Blacklock’s Reporter said the finance department projects deficits will total two-thirds of a trillion by 2025..“The federal government’s current reliance on borrowing rather than taxation to fund its programs is unprecedented,” testified William Robson, CEO of the C.D. Howe Institute..“That means the apparent cost of federal programs to taxpayers is unprecedentedly low. This situation will not last.”.Robson predicted a “sharp increase in the tax costs of federal programs that is inevitable over the next four to five years.”.“How important is it for the federal government to actually get the revenue side right?” asked New Democrat MP Peter Julian (New Westminster-Burnaby, B.C.)..“We’re not going to sustain programs that we’re talking about unless there is something done on the revenue side,” replied Robson..Prime Minister Justin Trudeau last September 24 said once the pandemic he would cut spending..“Absolutely, once we are through this pandemic, it is going to be extremely important to be fiscally responsible and sustainable,” said Trudeau..Robson on Thursday told the finance committee, taxes currently fund less than half the true cost of federal programs with the balance paid through debt..“You’re not doing anyone any favours by pretending you can have these things for fifty cents on the dollar,” said Robson..“The tax cost of a program dollar was 46 cents. The federal government borrowed more than half of every program dollar it spent. That is unprecedented..“Easy credit undermines good decision-making. We prevent people using credit cards to buy lottery tickets for a reason.”.A bill currently before the Commons would raise the federal debt ceiling 56 percent under the Borrowing Authority Act, from $1.168 trillion to $1.831 trillion. It is the largest debt in Canadian history..“The hundreds of billions or trillions of dollars that we’re now talking about in programs and debt are a bit hard to grasp,” said Robson..“Those numbers are astonishing, as is the fact this is projected to cover borrowings only until March 31, 2024, about three years from now..“Those of us who remember the federal government’s fiscal problems of the 1980s and 1990s get little comfort from assertions that borrowing on this scale is not a problem,” said Robson..The finance department has projected ongoing deficits will total $652.6 billion including $381.6 billion last year, another $121.2 billion this year, $50.7 billion in 2022, $43.3 billion in 2023, $30.9 billion in 2024 and $24.9 billion in 2025..“Looking forward, if we don’t deal with public finance we do risk doing exactly what the governments of the 1970s did, putting the future generations at risk,” said Conservative MP Pat Kelly (Calgary Rocky Ridge)..Dave Naylor is the News Editor of the Western Standard.dnaylor@westernstandardonline.com.TWITTER: Twitter.com/nobby7694
