Budget 2022: Another Day Older and Deeper in Debt
A “budget” is actually a euphemistic term when applied to the NDP-Liberals’ plan to continue spending more than they take in. This Prime Minister has not made any serious attempt to control spending since his dreamy prediction in 2015 that “the budget will balance itself.”
That philosophy has never worked and won’t work in 2022. You can’t spend your way out of debt. As has been astutely observed many times, when you realize that you’ve been digging yourself into a hole, the first thing to do is to stop digging. Instead, Mr. Trudeau has called for more shovels.
On Thursday, April 7, 2022, Finance Minister Chrystia Freeland tabled the 2022 Federal Budget Bill. Ms. Freeland’s budget for 2022-2023 predicts deficit spending (credit card spending) of $52.8 billion, which, she points out, is half that of fiscal year 2021-2022. Every dollar of that deficit adds to the growing national debt and will need to be repaid over time. Prior to Mr. Trudeau’s election in 2015, he predicted only three years of “moderate” deficits of about $10 billion. His government’s fiscal record was already atrocious prior to the pandemic; when he was able to blame COVID for his overspending, it reached dizzying heights.
The Canadian Taxpayers Federation estimates that interest alone on Canada’s existing $1.2 trillion debt will cost Canadians about $26.9 billion this year, or nearly $74 million per day! In 2015, when the Trudeau Liberals took office, the national debt was $628.9 billion. It has nearly doubled in 6 years, increasing at a rate of $95 billion per year, averaging over COVID and pre-COVID years.
The whole spin of the current government and their taxpayer-subsidized news media partners is that spending and debt are at reasonable levels when compared to GDP (Gross Domestic Product), which rose in the past year due to inflation, higher prices for oil and gas (yes, the very sector the Liberals have harassed and hampered) and some increased business taxes imposed on commercial banks and insurers. Some have referred to these increased revenues as a “windfall,” and they try to justify the reckless spending of this money because it was unexpected. That’s like a guy who owes you $100, gets a bonus from his company, and spends it on luxuries instead of paying his debt. To him, it’s “extra money;” to you, it’s your $100, and he has no business spending it on himself.
Below are a few troubling items in Budget 2022. The Finance Minister’s skillset includes using high-sounding phrases to cover ineffective or wasteful uses of taxpayers’ money. Of course, much of the repayment of deficit spending (borrowed money, including interest) will fall on taxpayers not yet born:
- Canada Growth Fund: Although cloaked in the language of economic growth, this fund is purportedly to fight “climate change.” Ms. Freeland says it will take $125 to $140 billion every year to reach its 2050 net-zero targets. Much could be said about these ineffective carbon targets, but the inevitable economic devastation that this government is willing to accept in their pursuit is staggering. Billions are being allocated to promote “zero-emission” electric vehicles (which will necessarily increase demand for electricity and all the emissions required to produce it, along with the unavoidable environmental demands involved in EV infrastructure).
- Stable Supply Chains: The gall of this government to spend money promoting “stable supply chains”—after undermining and hamstringing our critical supply chains over the past two years with COVID lockdowns and vaccine passports—is beyond belief. The best thing the government could now do for supply chains is to get out of the way and let businesses (including truckers) make sound business decisions with a minimum of interference.
- Innovation and Research: The Finance Minister apparently thinks that throwing money at businesses and establishing new government programs will improve our ability to invent and innovate. Every initiative of this government seems to involve spending more money and expanding the size of the government payroll instead of cutting red tape and allowing business owners and entrepreneurs to prosper. Even in research, the NDP-Liberal hardliners must include a racial component, creating a special fund for training Black researchers. Since when was providing money to students based on race a good idea? Only for partisan political advantage.
- Reducing the Backlog of Surgeries and Procedures: Under the umbrella of healthcare, the government wants to be seen as helping with the backlog of medical procedures that has developed over the past two years. Both federal and provincial actions have created huge inefficiencies in the provision of healthcare including, but not limited to, the firing or termination without cause of countless doctors, nurses, paramedics and hospital staff. This situation has never been dealt with. Thousands of families have lost their family doctors, and there has been no action by any level of government to bring them back. The termination of trained medical professionals is the largest single factor contributing to the backlog.
Budget 2022 makes repeated obsequious overtures to groups it considers disadvantaged by race or gender. The endless hype about climate change is, once again, becoming the lead story, replacing the tiresome COVID narrative, although recent governmental deficits are still being blamed on COVID. History, will tell a very different story unless Bill C-11 censorship prevents it from being told.
It’s only fair that I also acknowledge one or two positive actions I see promoted in Budget 2022:
- Dental Care: $5.3 billion for dental care will be made available to Canadians with family incomes of less than $90,000. It is true that many Canadians can not afford good dental care and there may be some justification for this extension of health care coverage. The danger is that government subsidies—like corporate dental plans—tend to push costs up.
- Defence: The increase in defence spending (now $8 billion) was overdue; we still fall short of the 2 percent of GDP recommended for NATO countries. Also, kudos for the $140 million over two years to reduce the shameful backlog of veteran disability claims. Long overdue. It may not be enough.
The comments above—both positive and negative—are not intended to be comprehensive. There is much more to evaluate in Budget 2022. You can find the entire text of the document here.
Other Commentary by Rod Taylor: