It is a disaster that Prime Minister Justin Trudeau has never balanced a budget. For one thing, nobody suffers more hurtful consequences from annual government spending with borrowed money than low-income Canadians..Then, the longer-term financial result brings a devalued Canadian dollar against other national currencies, so our dollar buys less. Repeated deficits create general inflation where everything cost more. The cost of food and basics goes up. Taxes remain high, and government services like healthcare support cannot keep up with the need. Rising debt service payments crowd out what should have been directly spent on services. Our national finances have never been so bad..A budget deficit is an annual shortfall between government spending and tax revenue. The deficit is the annual amount the government needs to borrow. The deficit is primarily funded by selling government bonds to the private sector. Deficit spending is purchasing exceeding income. Wrong-headed governments have political incentives to spend more than they take in..They unwisely over-promise to get short-term voter support. Trudeau says "we have your back". That is code for irresponsible spending, and damned be the consequences..Each year's deficit is added to the ongoing national debt. The government’s main source of revenue is from taxes — income tax, GST, corporate taxes, and capital gains tax. Money can also come from smaller government enterprises, such as Canada Post. Most of the money goes to direct program spending and money allotted to people — pensions, for example — and transfers to provinces. A percentage goes interest payments on the national debt..There is a relationship between yearly deficits and federal debt. When the government has just enough revenue to cover its expenses, the books are considered balanced. If a government wants to balance the budget and avoid going into a red deficit, it can either raise taxes or reduce its spending. Raising taxes is usually unpopular and often avoided by weak-minded governments for political reasons..So long as a government can manage the interest payments while also funding its expenditures, everything seems fine for a while. But when an unpredictable international crisis occurs, past poor management puts the nation in peril. When interest payments eat into other budgetary items that sustain the government's operations, the nation is not ready to financially defend itself from the next international crisis. Trudeau has made Canada vulnerable..How bad is it? Jake Fuss, Associate Director of Fiscal Studies at the Fraser Institute paints an awful picture..“Per-person federal program (inflation-adjusted) spending is expected to reach $11,498 in 2022-23—5 percent higher than in 2019, pre-COVID.” “The level of per person spending continues to be unprecedented for Canadian history even when compared to recessions and wartime, excluding the recent COVID crisis,” says Jake Fuss. “Federal spending reached $19,208 per person in 2020-21, which represents the highest level in the country's history.”.“Critically, even if COVID-related spending is excluded, 2020 and 2021 are still the two highest per-person spending years in Canadian history.”.“Among post-World War II prime ministers, Prime Minister Justin Trudeau has overseen the second largest annual average increase in per-person spending at 6.8 percent (though this spending was partly influenced by the COVID-19 pandemic.)”.“In fact, the current federal government is on track to record the five highest levels of per-person spending (2018 to 2022) in Canadian history.”."By all indications, the 'new normal' level of federal program spending is substantially higher than even the record-high levels of spending we experienced pre-COVID — and this year is no exception," Fuss said. "This high level of deficit-financed spending will have to be repaid eventually, and that will have implications for future taxpayers who will face tax hikes to pay for today's spending.".Canada can’t afford the Trudeau administration. He has made Canada vulnerable to foreign political interference from China, Russia, and Iran. He has also left Canada financially weak to defend itself from the next international disaster.
It is a disaster that Prime Minister Justin Trudeau has never balanced a budget. For one thing, nobody suffers more hurtful consequences from annual government spending with borrowed money than low-income Canadians..Then, the longer-term financial result brings a devalued Canadian dollar against other national currencies, so our dollar buys less. Repeated deficits create general inflation where everything cost more. The cost of food and basics goes up. Taxes remain high, and government services like healthcare support cannot keep up with the need. Rising debt service payments crowd out what should have been directly spent on services. Our national finances have never been so bad..A budget deficit is an annual shortfall between government spending and tax revenue. The deficit is the annual amount the government needs to borrow. The deficit is primarily funded by selling government bonds to the private sector. Deficit spending is purchasing exceeding income. Wrong-headed governments have political incentives to spend more than they take in..They unwisely over-promise to get short-term voter support. Trudeau says "we have your back". That is code for irresponsible spending, and damned be the consequences..Each year's deficit is added to the ongoing national debt. The government’s main source of revenue is from taxes — income tax, GST, corporate taxes, and capital gains tax. Money can also come from smaller government enterprises, such as Canada Post. Most of the money goes to direct program spending and money allotted to people — pensions, for example — and transfers to provinces. A percentage goes interest payments on the national debt..There is a relationship between yearly deficits and federal debt. When the government has just enough revenue to cover its expenses, the books are considered balanced. If a government wants to balance the budget and avoid going into a red deficit, it can either raise taxes or reduce its spending. Raising taxes is usually unpopular and often avoided by weak-minded governments for political reasons..So long as a government can manage the interest payments while also funding its expenditures, everything seems fine for a while. But when an unpredictable international crisis occurs, past poor management puts the nation in peril. When interest payments eat into other budgetary items that sustain the government's operations, the nation is not ready to financially defend itself from the next international crisis. Trudeau has made Canada vulnerable..How bad is it? Jake Fuss, Associate Director of Fiscal Studies at the Fraser Institute paints an awful picture..“Per-person federal program (inflation-adjusted) spending is expected to reach $11,498 in 2022-23—5 percent higher than in 2019, pre-COVID.” “The level of per person spending continues to be unprecedented for Canadian history even when compared to recessions and wartime, excluding the recent COVID crisis,” says Jake Fuss. “Federal spending reached $19,208 per person in 2020-21, which represents the highest level in the country's history.”.“Critically, even if COVID-related spending is excluded, 2020 and 2021 are still the two highest per-person spending years in Canadian history.”.“Among post-World War II prime ministers, Prime Minister Justin Trudeau has overseen the second largest annual average increase in per-person spending at 6.8 percent (though this spending was partly influenced by the COVID-19 pandemic.)”.“In fact, the current federal government is on track to record the five highest levels of per-person spending (2018 to 2022) in Canadian history.”."By all indications, the 'new normal' level of federal program spending is substantially higher than even the record-high levels of spending we experienced pre-COVID — and this year is no exception," Fuss said. "This high level of deficit-financed spending will have to be repaid eventually, and that will have implications for future taxpayers who will face tax hikes to pay for today's spending.".Canada can’t afford the Trudeau administration. He has made Canada vulnerable to foreign political interference from China, Russia, and Iran. He has also left Canada financially weak to defend itself from the next international disaster.
