EDITORIAL: Spending and debt weighing us down
Article content
Prime Minister Justin Trudeau and Finance Minister Chrystia Freeland insist they know what they’re doing when it comes to guiding the Canadian economy through the COVID-19 recession.
But the actual data suggest Canadians are paying more and getting less from massive government spending.
Recommended Videos
tap here to see other videos from our team.
EDITORIAL: Spending and debt weighing us down Back to video
tap here to see other videos from our team.
Unemployment in Canada, at 9%, is second-highest among the G7 countries — Canada, U.K., U.S., Australia, France, Italy and Japan.
Only Italy, at 9.7%, is higher and our unemployment rate is among the highest in the industrialized world.
According to new data from the International Monetary Fund, our projected deficit to Gross Domestic Product ratio of 19.9% this year is highest among all 35 industrialized countries that belong to the Organization for Economic Co-operation and Development (OECD).
tap here to see other videos from our team.
Canada’s share of the economy represented by all government spending, at 57.3%, is sixth-highest, while our recession is expected to be more severe than many comparable countries, including Australia and Germany.
“What is becoming clear is that the record-high spending that we’ve seen in Ottawa and around the country, both before and as a result of the COVID-19 crisis, is not translating into better economic performance” said Jason Clemens, executive VP of the Fraser Institute.
Despite this, Trudeau insists it would be “premature” to deliver a new federal budget in light of the COVID-19 recession, nor to establish what his new fiscal anchor will be.
It used to be to keep Canada’s debt-to-GDP ratio — a measure of a country’s overall economic performance — at an ideal level of 27%, which Trudeau never achieved.
tap here to see other videos from our team.
When the pandemic hit it was about 31%. Now the Liberals are predicting it will be 49% this year, but with no plan on how to lower it, what the new targets will be, or when, if ever, the nation will see its next balanced budget.
Freeland said this week that the government’s “fiscally expansive approach to fighting the coronavirus cannot and will not be infinite,” without explaining when it will become finite.
Low interest rates and the fact Canada went into the recession with the lowest debt-to-GDP ratio among the G7 countries means our debt load is sustainable for now.
But going forward? Who knows and the Trudeau Liberals aren’t saying.
Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information.