“Spending within your means seems to be passé today,” former Ontario Premier Mike Harris told Saskatchewan’s Pipeline Online energy podcast in March. “Nobody seems to care about massive deficits or debt. We need another ‘common sense revolution’ — because, frankly, we’re burdening our children and grandchildren.”With Canada now in a “technical recession,” every single Canadian province is running a deficit, and overall government spending comprises a whopping 43.6% of our country’s total economy. As part of Ontario’s recent $244.2 billion budget, for one, the provincial deficit nearly doubled, to $13.8 billion.When it comes to deficit spending, governments can’t blame super-events (COVID-19, tariffs, the Iran war) forever. At some point, they have to be courageous enough to structurally tackle health, education, and social services reform — let alone tax reform. In the meantime, a ballooning public sector is driving up taxes, reducing private investment, and weakening productivity.This as the personal debts of Canadians are mirroring governments’ debts. According to Statistics Canada, household debt is now $3.2 trillion, with more than $2 trillion in mortgages. “After repeated economic shocks, there is declining confidence, rising reliance on credit for essentials, and growing emotional strain,” Calgary MNP president Grant Bazian recently told the federal Commons Finance Committee. “Many Canadians are within $200 of insolvency each month.”.PM Mark Carney may be promising to “work relentlessly to cut waste.” But federal debt is on track to hit $2.4 trillion, while debt interest is $59 billion — now worth the equivalent of more than $33,000 for every Canadian. Carney has even managed to outspend his predecessor on the Privy Council office, including on gourmet in-flight meals for him and his entourage, worth almost $200,000.Meanwhile, the federal Parliamentary Budget Officer and major credit rating agencies are flagging a worrying pattern: that major federal spending commitments are increasingly being made without basic details about delivery or future controls. In March, Finance Minister François-Philippe Champagne even announced that the federal government had “found” $60 billion in savings across different departments, without naming a single one. His Main Estimates, tabled in February, were no more explicit.Such economic dilettantism is becoming embarrassing.Cue the federal government’s recent launch of its “sovereign wealth fund” with $25 billion of borrowed money, which will also cost taxpayers $750 million in debt interest charges. Norway’s sovereign wealth fund, built on surpluses, long-accumulated savings, and resource revenues, and currently worth $2 trillion USD, invests abroad. Canada’s proposed fund — which is more like a government-run mutual fund — will invest in domestic pet projects and imitate the work of already-existing entities such as the Canada Infrastructure Bank and Canada Growth Fund..How did we get here? An endemic spending attitude. Some recent examples of serious overspending, big and small(er): Almost $1 billion for thirteen FIFA World Cup games was shared among the federal government and host provinces. $4.2 billion was spent to replace the troubled federal Phoenix pay system. It cost $18 million to reopen the Canadian consulate in Milan, which showcases “efforts to combat climate change.”There’s more: $300 million was allocated to federal digital service PrescribeIT, although fewer than 5% of prescriptions flow through it, and $1.2 million was spent on cameras for homeless individuals to take photos for an arts-based exhibition approved under a “veteran homelessness” program. They committed $194 million to the Nutrition North food subsidy program, despite “insufficient evidence” that it’s actually lowering grocery prices. Another $9 million was spent on advertising in French-speaking countries such as Cameroon and Togo, approved by the Department of Immigration to promote immigration.And more: $230 million in federal funding was allocated for Inuit community programs, including $50 million to support the first Inuit-led university. Subsidizing private sector newsrooms for $170 million, on top of a previous $600 million already provided. And last but not least, $1.4 million was spent on a ‘net zero’ government-owned garage in Whitehorse, which took ten years to build.We have to stop spending like this.If governments are serious about growth, they must refocus on efficiency: curb spending, lower taxes, simplify regulations, cut red tape, accelerate approvals, and remove barriers to private investment. Now.Bronwyn Eyre is a former Saskatchewan Cabinet minister and a senior fellow with MEI. This column appeared in a modified form in the Winnipeg Sun.
