The Niagara Independent, November 24, 2023 – Perhaps there is no greater harm done by Justin Trudeau and his eight years as Prime Minister than robbing future generations of Canadians of their standard of living. The Trudeau government has spent senselessly, ladening Canadians with a debt load that will take decades to pay off. Trudeau’s fiscal record – by every accounting – amounts to a gross failure that has disadvantaged Canadians and their present and future potential prosperity.
The Trudeau Liberals have fastened Canadians into a fiscal straight jacket that will negatively impact their standard of living for at least a generation, possibly more.
Undisciplined deficit financing
Recall in the 2015 election when Justin Trudeau stated that his government would incur small deficits to establish its progressive agenda. Promising the Liberals would balance the budget by 2019, he reassured voters that “the budget would balance itself.” However, under the fiscal stewardship of Trudeau and his Bay Street Finance Minister Bill Morneau, the Liberals had an accumulative deficit spending of $127 billion through the first term (and can anyone cite what Canadians got for this spending spree?). Then, the Liberal government recorded in a single year – the 2021 pandemic budget – a deficit that exceeded all previous federal government fiscal deficits combined throughout Canada’s history. In the post-pandemic budgets, the red ink has continued to flow – and this fiscal year, the deficit rings in at $40 billion. Verily, soaring annual deficits are the hallmark of the Trudeau Liberals.
With the year-over-year deficits, Canada’s debt load has doubled since 2015. With today’s higher interest rates, financing this national debt is costly and even costlier. For example, in August, Canadians paid more than $4.3 billion in interest payments (setting a new record for Canadian taxpayers). This year, Canadians are paying $46.5 billion to service the debt, and four years from now, that figure will climb to nearly $60 billion. So, “Why does this matter?” those financially challenged might ask. The billions of dollars of interest being paid on the debt takes directly from the money the government has to spend on programs and services or to provide possible tax relief.
Unbridled government growth
The weightiness of government has increased notably with Trudeau – both ballooning in costs of operations and bulging in numbers of civil servants. This year, taxpayers are spending a total of $210 billion on Ottawa’s operational costs of bureaucracy (not including pension and perks). The civil service has swelled from 257,000 in 2015 to 357,000 bureaucrats today, which is the greatest number in Canadian history. What is more remarkable is that during the two years of the pandemic and COVID lockdowns, the Ottawa bureaucracy actually grew by 12 per cent. Today, the federal government is the single largest employer in the country.
Sluggish economic performance
Another important variable when assessing the impact of federal fiscal policy on a country’s economic well-being is the country’s gross domestic product (GDP) – and how Canada compares with its global competition. The trend lines in a nation’s GDP will reflect the direction of a people’s standard of living. In looking at the numbers since 2015, there is no good news as Canadians’ productivity and the country’s GDP has waned with the Liberals management of the economy – and most recently, Canada has experienced an economic contraction as recorded by a real GDP per capita decline.
Statistics Canada reported that Canadian labour productivity has declined in 11 of the past 12 quarters, and today, it is “below pre-pandemic levels.” Moreover, since the third quarter of 2015, real GDP per capita in Canada has increased “a paltry 1.6 per cent,” which is far below expectations of 8.2 per cent. For comparison, the United States has seen 12.5 per cent growth over the same period. Essentially, these numbers are foul news for Canadian’s standard of living; we are falling behind our neighbours.
Declining standard of living
When global economists look at the prospects for up and coming generations, there are dark clouds gathering over Canadians. The Organization for Economic Co-operation and Development (OECD) projects that growth in living standards in Canada will rank dead last among its 38 developed member countries over the next 40 years. The OECD is critical of federal government spending, especially during the pandemic when Canada outspent all countries in the world. It cites the major factors for the country’s lacklustre economic performance as waning business confidence and decreasing domestic and foreign investment in Canadian businesses and projects. The OECD foresees Canadians’ standard of living in a steady decline.
Trudeau Liberal’s defying reality
Finance Minister Chrystia Freeland delivered the government’s Fall Economic Statement this past week. With all the financial acumen of a career journalist, Freeland touted her budget update as a “responsible fiscal plan.” She did not blink an eye in announcing tens of billions of dollars of new spending and, in her teacher-like manner, harped on about the government’s discipline in setting a new cap for the size of future budgets. Interestingly, the first budget that will be subjected to this new guideline is in the next Parliament, after the election. Also of note, Freeland did not mention when the Liberals would balance the budget. (One is to assume that it will balance itself?)
The Fall Economic Statement and Freeland’s performance was justifiably panned. It appears that Canadians who have been suffering through the most financially stressful times since Pierre Elliot Trudeau was in office are beginning to realize the ramifications of eight years of a Justin Trudeau government.
Matthew Lau summed up the mood of the nation in his National Post column commenting on the Trudeau-Freeland fiscal plan:
“The government has spent and regulated the country into ruin… Canadians are suffering an economic crisis of unaffordability, the worst decade of growth since the Great Depression… Canada too can reverse its decline before it becomes an honorary member of the Third World, but it will require undoing everything the Trudeau government has done since 2015 and that it continues to do now.”
The last word on the Trudeau government’s fiscal nightmare goes to CTV News veteran political commentator Don Martin, who delivered his signature “bottom line” in observing, “The borrowing of today will be paid with high interest by the kids who become the taxpayers of tomorrow. They are owed a proactive apology for squandering their hard-earned income tax on the questionable expenses we have incurred.”
Canadians’ fiscal straight jacket is a definitive part of Justin Trudeau’s legacy. It is an indelible smudge on Trudeau’s record that our children will be the first Canadians not to exceed their parents’ good fortune and standard of living.
This is the second of a six-part series that takes account of Justin Trudeau’s eight-year record pursuing his “post-national” vision for Canada.