A brief walk through history—government spending by prime minister
After more than 151 years of Confederation, it’s informative to look back at the spending records of Canada’s 23 prime ministers and see how those records relate to Ottawa’s changing role in society.
In a recent study, we analyzed government program spending by each Canadian prime minister since 1870, calculated per person spending (adjusted for inflation), and excluded interest costs on government debt so we didn’t penalize or reward prime ministers who faced abnormally high or low interest rates during their tenure. Here’s what we found.
In 1870, per-person program spending amounted to a little over $100 under Prime Minister John A. Macdonald. Per-person spending rose to $567 by 1913 and increased again to $1,240 in 1916 during Sir Robert Borden’s tenure. The large increase during this period was largely to finance military efforts during the First World War. Following the war, per-person spending was cut by roughly 50 per cent in 1920 and spending levels returned to pre-war levels.
The Second World War saw a more pronounced spike spending. Prime Minister William Lyon Mackenzie King oversaw increases in per-person program spending from $966 in 1939 to a wartime high of $6,998 in 1943. After the war, per-person spending dropped to $1,630 by his last year as prime minister in 1948. However, per-person spending did not return to its pre-war level.
Per-person program spending increases ramped up again in the 1960s under Prime Minister Lester B. Pearson who increased spending from $2,908 in 1962 to $3,740 in 1967. His successor, Prime Minister Pierre Trudeau, continued this trend by increasing per-person spending to $7,471 by 1982.
Prime Minister Brian Mulroney stabilized spending during his tenure from 1984 to 1993 with an annual average decrease of 0.3 per cent. Afterwards, Prime Minister Jean Chretien implemented critical fiscal reforms and reduced per-person spending by 16.5 per cent between 1994 and 1996.
The ensuing eras of prime ministers Paul Martin and Stephen Harper involved a return to increases in per-person spending levels. Prime Minister Martin oversaw annual average spending increases of 2.6 per cent, while Prime Minister Harper oversaw a 1.5 per cent annual average increase. However, Prime Minister Harper’s spending increases were largely due to the global recession in 2009. During the recession, per-person spending spiked 16.9 per cent and reached its highest level in Canadian history ($8,711). Following the recession, per-person spending under the Harper government dropped 12.8 per cent by 2014.
Most recently, per-person spending levels reached $8,639 in 2018 under Prime Minister Justin Trudeau—only $72 short of the all-time high of 2009. It’s worth noting that the level of spending under the current prime minister has occurred during a period without a recession or significant military conflict.
In the overall rankings of post-Second World War prime ministers, Joe Clark holds the record for the largest average annual decline in per-person spending at 4.8 per cent. However, Clark was prime minister for less than a year.
Conversely, Prime Minister Louis St. Laurent recorded the largest average annual increase in per-person spending (7.0 per cent), though this spending was influenced to some extent by the Korean War, followed by Prime Minister Lester Pearson (5.3 per cent), Pierre Trudeau (4.5 per cent) and Justin Trudeau (3.1 per cent).