Canadians won’t like what comes next — the higher taxes that the current lack of fiscal discipline makes inevitable, writes Jack Mintz in the Financial Post. Below is an excerpt from the article which can be read in full here.
By Jack Mintz, December 4, 2020
I was hoping our new minister of finance, once a fine journalist, might produce a fall fiscal statement written clearly and to the point. Instead, we are treated to 237 pages of repetitive back-slapping and cliché-laden phrases that few will bother to read.
The statement does leave one clear impression: Ottawa believes only massive public spending and deficits can generate economic growth.
The fiscal update does not say by how much each dollar of government spending increases GDP but during the pandemic it must be low. Household incomes rose by 13 per cent during the downturn, more than in any other OECD country (even the U.S. during its election year). But despite all this new money, households did not spend more. Instead, our household saving rate jumped by 23 per cent of personal disposable income, more than in any other country. The update spins this embarrassing fact by saying Canadians were getting a “down payment” now to spend later.