Despite Trudeau’s campaign promise of just three years of “modest” deficits, Canada faces years of red ink with no end in sight.
Outside the Liberal Caucus meeting in St. John’s, Finance Minister Bill “Moneybags” Morneau said the government plans to continue running deficits, once again contradiction one of the key election promises made by Justin Trudeau in 2015.
During that campaign, Trudeau said the Liberals would run three years of deficits, totaling about $25 billion combined. Instead, they’ve run deficits of around $25 billion per year.
This raises serious legitimacy issues for the Trudeau government, as it is unlikely they would have won a majority government promising endless deficits with no plan to reach balance.
Now, Morneau says the government will keep “investing”, which means borrowing money and adding to the debt, increasing the amount of money spent on interest payments instead of being available for infrastructure, healthcare, and tax reductions.
Interest rate concern
The endless Liberal deficits are an added concern with interest rates going up, making interest payments more and more costly. Despite being handed a balanced budget by the Harper government, and despite a global economy that is growing (as opposed to the crisis of 2008-2009), the Trudeau government keeps blowing through wads of cash.
Meanwhile, the economy lost 88,100 full-time jobs last month, personal debt continues to skyrocket, and investment is fleeing the country.