As budget day approaches, Finance Minister Bill Morneau and Prime Minister Justin Trudeau ought to reflect on what good their last budget has done for Canadians. Whichever metric we look at, the sad truth is the average Canadian is in no way better off, despite the federal government spending tens of billions of dollars more than it had in its coffers.
When a government runs deficits, it usually does so to try and kick-start a country’s economy, to put it back in high gear. That should usually be reflected through lower unemployment and strong GDP growth. However, according to RBC Economics, Canada’s real GDP growth will be a meager 1.2% in 2016, far below the 5-year average of 2.1% from 2011 to 2015. While GDP has barely been growing, unemployment has fallen by 0.2%. But, as opposed to previous years, this growth is mostly due to part-time employment growth, and not full-time employment, leading to higher job insecurity amongst Canadians. Despite spending an extra $700 per Canadian than what they brought in through taxes, the government could not achieve its objective.
The sad thing is those billions of dollars only keep piling up. According to the Finance department’s own economists, Canada risks running deficits for another 35+ years, putting our country’s financial well-being at risk. As the debt keeps rising, so do our yearly debt interest payments. This year alone, it is nearly $25 billion worth of interest payments the federal government had to make, without repaying any of the capital. This is money which cannot be used to help everyday Canadians, but is rather spent repaying various funds and financiers for the money they have loaned us.
As Mr. Morneau and Mr. Trudeau have campaigned on a platform of evidence-based decision making, perhaps it is time they come to a realization that has been self-evident to so many Canadians: their deficits do not work and only make future generations worse off. Let’s balance that budget and keep it balanced, for Canada’s sake.