After breaking their promise to eliminate the deficit and adding $1.4 trillion to the debt, the Liberals now plan to add another $trillion to it in the next four years. They have abandoned all pretense of eliminating the deficit. The Conservatives, NDP and Greens also plan to have deficits for at least the next five years.
None of the other parties believes in fiscal responibility anymore. In order to buy votes, they all made spending promises totalling hundreds of billions of dollars and proposed targeted tax measures that will only complicate Canada’s tax system and make it less fair.
This is irresponsible. If a recession hits, the federal government will be in a precarious fiscal situation and could lose control of its finances. Moreover, no broad-based reduction in the tax burden will ever be possible with a government that keeps growing and paying for new programs with borrowed money.
Former CPC leader Andrew Scheer abandoned his previous commitment to eliminate the deficit in two years, and now claims he needs five years to eliminate a $20-billion deficit. But between 1995 and 1997, the Liberal government of Jean Chrétien went from a $43-billion deficit (in today’s dollars) to a $4-billion surplus in just two years. It can be done.
In 2018-2019, government revenues were $8 billion higher than anticipated. However, instead of reducing its deficit by almost half, the Trudeau government decided to spend all the money. A government that controls spending while its revenues are growing will have the fiscal room to eliminate the deficit and cut taxes if it makes this a priority.
Our tax system is overly complicated. Canadians spend $7 billion each year to comply with our tax laws, or about $500 per household on average.
Debts and deficits are nothing more than deferred taxes on our children and grandchildren. Instead of buying votes with borrowed money, a responsible government should cut spending, balance the budget as quickly as possible, and then lower taxes in a prudent manner to put money back into Canadians’ pockets.