This article originally appeared in the Financial Post. Below is an excerpt from the article.
By Jack Mintz, December 19, 2024
In her letter of resignation, Chrystia Freeland criticized Prime Minister Justin Trudeau in pushing for gimmicky tax holidays and one-time rebates rather keeping the government’s fiscal powder dry in case Canada faces aggressive Trump tariffs. She is absolutely right, of course. Bad things can happen — like the COVID pandemic — that ratchet up debt burdens and interest costs and eventually impair growth by raising interest rates or taxes.
However, she has discovered religion too little, too late. Her recent fiscal plans are loaded with new spending, whether needed or not. This past year’s deficit was widely off the mark raising serious issues about Finance Canada’s ability to project deficits.
To begin with, it is shocking that the final deficit figure for the 2023/24 fiscal year has come in at $61.9 billion, almost $22-billion higher than the projected deficit of $40 billion in Budget 2024.
That budget was delivered on April 16, 2024, after the fiscal year ended on March 31. So how could a budget deficit end up 50-per-cent higher after the year was completed?
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Jack Mintz is the President’s Fellow at the University of Calgary’s school of public policy and a distinguished fellow at the Macdonald-Laurier Institute.
