I responded to the Liberal Government's 2021 federal budget in the House of Commons.
An excerpt from my remarks:
Canada's deficit in 2019 of $27 billion in a $2.3 trillion economy was about 8.3% of government revenues. In an economic boom, Canada was overspending by 8.3%. This is the rationale from the Liberal Prime Minister about running deficits in boom times. On March 21, 2016, he said in the House:
Mr. Speaker, record low levels of interest rates right now mean that this is an opportunity to invest in our future...This is what we are delivering to grow the economy and help the middle class.
By contrast, in this year's budget announcement, the Minister of Finance said:
The best way to pay our debts is to grow our economy....In fact, in today's low-interest rate environment, not only can we afford these investments, it would be shortsighted of us not to make them.
By “investments”, of course, she means government spending. Those two are clearly at odds, but it is obvious that neither the Prime Minister nor the finance minister understand the notion of financial risk. Clearly, the Liberal government will justify spending taxpayer funds in good times, and spending taxpayer funds in hard times. It begs the question, what times are not good for overspending taxpayer funds?
The forecast budget deficit for this fiscal year coming, according to yesterday's budget, is $154.7 billion. That is almost $50 billion higher than forecast in the fall economic statement despite last year's revenues out performing by $35 billion since the fall. Planned spending represents an increase of $136 billion over the next five years in addition to the $548 billion in spending forecasts in the fall economic statement. How is this justified?
These deficits accumulate to an ongoing debt-to-GDP ratio at 50% going forward, so the plan, the fiscal anchor, is to maintain Canada's debt at half the size of our economy for the foreseeable future. Is that an anchor? The better our economy performs the deeper in debt we get to go? We say in finance that every economic forecast is wrong from the moment it is written, and rightly so. Things change and getting close based on discipline and unforeseen extraneous events coming at people spells success.
There is none of that in this budget. There is no security for our children. There is multiplying risk. It is our job to leave the country in better shape than we found it. Fiscally and in so many other ways we are failing.