This article originally appeared in Financial Post.
By Jack Mintz, April 5, 2022
Last week, I argued that a fiscally-conservative Ottawa — if you can wrap your head around such a concept — would be in a position not only to balance its budget in the near term but also to hold the line on taxes and maybe even reduce them a little. Thanks to inflation and a robust recovery, revenues have jumped so much in the fiscal year ending this week that the budget was almost balanced for the fiscal year’s third quarter. And last Friday, Finance Canada announced that the deficit for the fiscal year’s first 10 months was $75 billion, with 90 per cent of that appearing in the first six months.
Many readers reacted to that column by arguing the new NDP-Liberal alliance will grow, not balance, budgets. They’re obviously right. Don’t expect a balanced budget within the next few years, even though it would be possible — even with new defence commitments. But the larger point is that we are at an inflection point, which Canadians need to consider seriously. What should be the role and size of the federal government? It’s a choice between politicians spending tax dollars or taxpayers having the freedom to spend their own money as they see fit.
Before the pandemic, federal spending had reached $335 billion, about $9,200 for each Canadian. With pandemic spending, federal spending almost doubled to $613 billion or $16,100 per capita. Common sense says that with the emergency over this sharp increase in per capita federal costs should fall back closer to pre-pandemic spending. Instead, “Build Back Bigger” says spending will reach new heights…
***Read the full article here***
Jack Mintz is a Distinguished Fellow at the Macdonald-Laurier Institute.
