Trudeau sets another record—and not in a good way
Prime Minister Justin Trudeau has set another record—increasing the federal debt (per person) more than any other prime minister (not facing a world war or recession) since 1870.
He earlier set a spending record, as the Trudeau government has spent more money (per person) than any other prime minister in Canadian history. Rapid debt accumulation, accompanied by unprecedented levels of spending is simply not sustainable—and Canadians will be left to deal with the consequences.
Let’s take a closer look at some of Justin Trudeau’s historic achievements.
As noted in a new Fraser Institute study, Justin Trudeau has overseen the largest increase in federal debt (per person) of any prime minister who did not face a world war or recession during his or her tenure. Federal government debt has grown 5.6 per cent ($1,723 per person) over the last four years under the Trudeau government. And Ottawa’s total debt (technically referred to as gross debt) is expected to reach $1.2 trillion in 2019.
For comparison, consider that since the 19th century, every former Liberal prime minister who, like Justin Trudeau, did not experience world war of recession, reduced the federal per-person debt. Indeed, Lester B. Pearson reduced per-person debt by 6.7 per cent. So did Paul Martin (by 7.6 per cent) and Jean Chrétien (by a striking 13.3 per cent).
Clearly, Justin Trudeau is an outlier by choosing to increase the debt during relatively good economic times. In fact, some prime ministers including Arthur Meighen and Mackenzie King even reduced per-person debt despite experiencing an economic downturn.
Back to the present, a significant reason for Ottawa’s growing debt burden is the proclivity for deficit-financed spending, also known as spending by borrowing. (Again, 2019 marks the highest level of federal inflation-adjusted per-person spending in Canadian history—Trudeau’s other recent historic achievement.)
By spending through borrowing, thus producing budget deficits, the federal government is sticking future generations with the bill for today’s spending. And just like households must pay interest on mortgages and credit cards, the federal government must pay interest on its debt. Higher debt means more tax dollars go to pay interest on the debt, which leaves less money for important programs such as health care, social services and tax relief.
So not only will Canadians bear the burden of higher debt accumulation and the associated debt-interest costs, they will eventually pay higher taxes to repay the debt—for the same or lower level of government services.
Clearly, the federal government’s current fiscal strategy is unsustainable.
With budget season fast-approaching, this government continues to set the wrong records. A growing debt burden, accompanied by historically-unprecedented levels of federal spending, is diverting tax dollars away from important programs and services, preventing the implementation of tax relief for hardworking Canadians, and will eventually increase the tax burden on Canadians. The sooner the Trudeau government recognizes this reality and charts a course for reform, the better.
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