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The Niagara Independent, July 7, 2023 \u2013<\/em> With much of central Canada under a heat warning this week, many of us are now feeling the heat of the summer. However, it is more than the weather that is making Canadians uncomfortable. Many are stressed with the increasing pressures felt by the rising cost of living \u2014 and the federal government\u2019s fiscal policies are seemingly making matters worse.<\/p>\n This week, 11 million \u201clow- or moderate-income\u201d Canadians received a one-time grocery rebate from the Trudeau government. The cash handout was part of the 2023 federal budget and is being provided to help individuals with their rising grocery bills. The opposition has tagged the relief payment the Liberals\u2019 Food Stamp Program.<\/p>\n If you earn under $35,000 and are single, you would have received a maximum payment of anywhere from $234 (no children) to $548 (with three children). A married or common-law couple received a maximum payment of $306 (no children) to $628 (with four children).<\/p>\n Finance Minister Chrystia Freeland announced the government\u2019s summertime grocery cheques at a Toronto corner store grocery chain. Freeland hailed the Liberals\u2019 fiscal record and credited her government\u2019s fiscal acumen with wrestling the country\u2019s inflation rate to 3.4 per cent in May. (Freeland likely chose her neighbourhood corner store to highlight this week\u2019s multi-million-dollar giveaway to individuals and families because she did not want a comparison with another photo op staged a while ago at a Loblaws where the Liberals gave $12 million to that grocery chain to subsidize new fridges.)<\/p>\n What was not accounted for in the finance minister\u2019s calculations on grocery prices was the hefty rise this past year in the cost of food, nearly triple the general inflation rate. Compared to 12 months ago food prices have risen on average a total of nine per cent \u2013 bakery products have risen 15 per cent. StatsCan\u2019s latest report on Monthly Average Retail Prices For Selected Products<\/i> shows yearly increases of:<\/p>\n These rising prices are making many nutritious food products unaffordable, as reported in the federal report Evaluation Of The Office Of Nutrition Policy And Promotion. <\/i>Evidently, 70 per cent of Canadians are not eating the recommended minimum five servings of fruits and vegetables daily. The report states: \u201cThere has been a decline in the consumption of fruits and vegetables\u2026. Recommended foods like nuts and seeds or fruit may not be easily available in some parts of the country or may be unaffordable.\u201d<\/p>\n What was also not accounted for in Freeland\u2019s announcement was the added cost to Canadians of her government\u2019s rising carbon taxes \u2014 including a new clean fuel regulation introduced on July 1. Starting this week, the federal government grabs a total of 14.3 cents tax per litre at the pump, which amounts to more than $8 with every fill up. Now they will add another eight cents on top of that by way of new regulations to fuel companies (taking another approximately $5 of tax with every fill-up).<\/p>\n So, for those individuals who are getting a maximum grocery rebate cheque of $234 this week, assuming you fill your car twice a week, you will pay out that money in the hikes to the carbon tax by just after Labour Day. In other words, that summertime grocery cheque is no more than a summertime carbon tax relief cheque.<\/p>\n There is another recent significant announcement that Chrystia Freeland chose not to comment on when she was walking the aisles and smiling before the cameras. Around the time the Bank of Canada raised its interest rate in early June, the bank\u2019s Governor Tiff Macklem made comments that signaled interest rates in Canada would not be coming down in 2023 \u2013 and would remain in the range of 4 per cent through 2024. Macklem also suggested that there would be a further rate increase this year, perhaps as early as next week, July 12.<\/p>\n The prolonged high interest rates forecast a whole lot of hurt for Canadians who are weighed down with consumer debt and mortgages. The reality is rather ugly given Canadians have the largest household debt as a percentage of income of all G7 countries (185.2 per cent according to the Organization for Economic Co-operation and Development (OECD) numbers \u2013 more than 80 per cent greater than our American neighbours).<\/p>\n Like the hot-under-the-collar situation individual Canadians are feeling with these heightened inflation rates, the federal government debt load is also adversely impacted. Expect that as interest rates rise, the interest payments on the government\u2019s debt will proportionally increase. It is a matter of record that the Trudeau government has added more federal debt to the country\u2019s balance sheet than all previous governments since Confederation \u2014 combined<\/i>. The Trudeau government\u2019s fiscal approach of \u201chaving budgets balance themselves\u201d and \u201cgrowing the economy from the heart out\u201d has increased each and every Canadian\u2019s share of federal debt by 35 per cent.<\/p>\n So, in Canada\u2019s last fiscal year the government paid $43.9 billion in interest charges to carry the national debt. In future years, with the higher interest rates, this debt service payment will be significantly more. Bottom line: money spent on interest means there is less money available for government programs and services.<\/p>\n Beyond this atrocious debt load, consider some of the dark economic realities Canadians now must face because of the Trudeau government\u2019s fiscal mismanagement.<\/p>\n Largely due to the dismal fiscal performance of the federal government in the last five years, the OECD projects growth in living standards in Canada will rank last among its 38 developed member-countries over the next 40 years. Canadians\u2019 standard of living will be in a steady decline.<\/p>\n As it is, Justin Trudeau and Chrystia Freeland may wish to tout the hundreds of dollars of cash relief they are doling out this week, but the forecast for Canadians looks much hotter and more uncomfortable than what we are currently experiencing through this sticky start to the summer.<\/p>\n Chris George<\/em><\/strong>\u00a0is an Ottawa-based government affairs advisor and wordsmith, president of\u00a0CG&A COMMUNICATIONS<\/a>. Contact:\u00a0ChrisG.George@gmail.com<\/a><\/em><\/p>\n\n
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