TERRAZZANO: Trudeau drives through budget guardrail, sends finances off cliff
Watching Prime Minister Justin Trudeau handle the budget is kind of like driving with that buddy who can’t keep his eyes on the road, talks with his hands and knows the autobody shop guy by name. It’s terrifying. The Trudeau government repeatedly promised to keep the 2023 deficit within its fiscal guardrail “at or below $40.1 billion.” But Trudeau’s Fall Economic Statement shows his government ran a $62-billion deficit last year. So the Trudeau government just smashed a huge hole in its own fiscal guardrail. Canadians are paying the price for Trudeau’s soaring deficits through higher taxes and debt-interest charges. The debt was $616 billion when Trudeau became prime minister in 2015. The debt will reach nearly $1.3 trillion this year. That means Trudeau doubled the debt in less than a decade. Because of the massive debt, Canadians pay a federal sales tax so Trudeau can cover the interest payments on the government credit card. That’s literally what’s happening. Interest charges on Trudeau’s debt will be $54 billion this year. GST revenues will be $52 billion. Think about that next time you’re looking at a receipt. Trudeau said he had a guardrail in place to keep Canada’s finances safe, but he just drove the deficit right through it. The government points to one-time “significant unexpected expenses” as the reason the deficit smashed through its fiscal guardrail by more than $20 billion. That doesn’t pass the sniff test for a few reasons. First, even without those “unexpected expenses,” the government’s deficit would have been $40.8 billion last year, breaking the guardrail. Second, this year’s deficit is projected to be $48 billion, which is still billions over the fiscal guardrail and doesn’t include those one-time expenses. Third, this is far from the first time Trudeau drove through his own guardrails. When he was first running to be prime minister, Trudeau promised a few “modest” deficits of less than $10 billion, before balancing the budget in 2019. Instead, Trudeau ran an $18-billion deficit in 2016, a $19-billion deficit in 2017, a $14-billion deficit in 2018 and a $20-billion deficit in 2019. Fourth, like any prudent family or business, when an unexpected bill comes up, the government should offset higher spending by finding savings elsewhere. After spending like drunken sailors for years, finding savings in every area of Trudeau’s budget should be like finding water in the ocean. In 2018, Trudeau’s spending already reached all-time highs, even after accounting for inflation and population growth. Trudeau then used the cloud of a pandemic to go on a debt-fuelled spending spree. The federal government announced $576 billion in new spending during the pandemic. More than $200 billion of that – or 35% – had nothing to do with the pandemic. Even when the government promises to spend less, it spends more. Last year, the government promised to find “savings of $15.4 billion over the next five years.” But the government is spending $25 billion more this year. Here’s where the government should save money: Start with the little things. Stop spending millions on government podcasts to which nobody listens. Don’t spend $8 million building a barn on the governor general’s estate. When you fly overseas, don’t spend more on food in four days than the average family spends in four years. Then tackle the big things. Shrink the federal bureaucracy, which consumes half of the government’s day-to-day spending. Trudeau ballooned the cost of the bureaucracy by 73% and added 108,000 bureaucrats to the taxpayer dole. End corporate subsidies, which cost taxpayers $11.2 billion in 2022 alone. By driving through another budget guardrail, Trudeau has proven he’s lost control of the finances. Canadians need politicians who are immediately willing to hit the brakes on spending. Franco Terrazzano is federal director of the Canadian Taxpayers Federation
