A report from the federal government says the budget won’t be balanced until 2055.
As first reported by Anthony Furey, the report was issued by the finance department, and it says lower growth and higher spending could lead to a collapse of Canada’s federal finances, with total federal debt surpassing the $1 billion mark in 2031.
If you recall, Justin Trudeau promised 3 years of budget deficits, then extended the deadline for balancing the books to 2021. Now, the federal report shows that date was only off by 34 years.
Nobody is shocked anymore when they find out the government has lied.
But it’s worse than that. The real problem is the combination of lower growth and rising debt.
While deficits can be problematic, the entire point of running a deficit is to grow the economy through economic stimulus. The best stimulus is either tax cuts, infrastructure investment, or a combination of the two.
People would be more accepting of short-term deficits if we saw increased growth. And increased growth makes debt more sustainable, since it becomes a smaller percentage relative to the economy.
But that’s not what’s happenning.
It seems our government is managing to suck and blow at the same time, running huge endless deficits while growth slows.
That’s not sustainable.
The new carbon tax will make things even worse, as any new revenue will be lost through further declines in economic growth and business competetiveness.
A new economic approach is needed for Canada
The federal report on Canada’s looming budget disaster shows that a brand new economic approach is needed.
As I’ve written previously, that approach must consist of a few core aspects:
- Strengthening our domestic economy by rejecting globalism and holding nations like China accountable when they break trade rules and flood our country with cheap goods at the expense of our manufacturing sector.
- Cut restrictive regulations, decentralize power to provinces and individuals and get Ottawa out of trying to control the economy – which they are clearly failing miserably at.
- Scrap the carbon tax – trust Canadians to make environmentally responsible decisions without the government further crushing us with more fees and taxes.
- Put the needs of Canadian workers first – instead of bowing down before foreign governments and international bankers.
- Build oil refinery capacity in our country, so all parts of Canada use only Canadian energy – end all oil imports from Saudi Arabia.
- Strengthening our military and expanding our defence industry to create jobs and drive innovation.
- Reducing the money that politicians control and put that money back in the hands of Canadian taxpayers.
It doesn’t have to be that way. As a country and as a people, we Canadians have so much potential. We must not accept a future of low growth, massive debt, and diminished expectations.
Photo – Twitter