Finance Ministry says budget forecasts ‘should not be viewed as a prediction of the future’

Facebook/ Liberal Party of Canada

Canada's finances are in shambles after copious pandemic spending of money taxpayers never had.

The federal government spent an unprecedented $309 billion on COVID pandemic relief, putting the fiscal future of Canada at risk, according to the C.D. Howe Institute. This is an underestimate compared to the $359.7 billion reported by the Fraser Institute.

Parliament wasted an estimated 25% of Canada's COVID spending ($89.9 billion) as either overpayments or money sent to ineligible recipients.

"The decisions that [were] made that [will] affect our future for years and decades to come were made on the fly without appropriate deliberation," said C.D Howe chief executive Bill Robson. 

"We need more transparency from our governments about how they're spending our money, especially when something like COVID happens."

The Public Health Agency claimed without lockdowns or health mandates, "20 times more Canadians" would have died in the COVID pandemic than in World War Two. https://t.co/1YGpVsCPoQ

— Rebel News (@RebelNewsOnline) July 8, 2023

Budgetary Officer Yves Giroix concurred with the bleak assessment during his April 18 testimony to a Senate finance committee. 

"I can certainly say expenditures are rising at a sustained rate," said Giroux. "If you plot this on a graph and look at the trend, we see the trend line going in one direction over the next three years."

Over the next decade, the total cost of wasteful COVID spending will be $111.0 billion, including $89.9 billion in wasteful spending and $21.1 billion in ongoing debt interest costs to service the debt from such wasteful spending.

According to Blacklock's Reporter, interest charges on the national debt will cost $43.9 billion this year, representing a $19.5 billion gain from the pre-pandemic rate of $24.4 billion. Of that, $8.3 billion in annual debt interest costs arise from COVID spending, and of that, $2.1 billion is attributed to wasteful spending. 

In a letter sent to the Parliamentary Budget Office (PBO) by Canada's finance department, they write that budget forecasts "should not be viewed as a prediction of the future."

Statistics Canada is facing some pushback from academia on suspicion they skewed data on spending across all levels of government.

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The debt to GDP level passed 45% in Budget 2023 — up from 30% in 2019. On April 7, 2022, Finance Minister Chrystia Freeland pledged to cut its debt-to-GDP ratio.

"We are determined that our debt to GDP ratio must continue to decline. This is our fiscal anchor, a line we will not cross," she said, adding: "Our pandemic deficits are and must continue to be reduced."

According to another Fraser Institute report, total federal spending rose 27% higher in 2022/23 than in 2019/20.

The COVID pandemic expenditures partly increased federal spending by 73% to $644.2 billion in 2020/21 before declining by 21% to an estimated $508 billion in 2021/22. However, much of the uptick in federal spending remained independent of the pandemic, "representing a permanent long-term ramping up of federal expenditure."

On the long-term debt-to-GDP ratio, Assistant Deputy Finance Minister Julie Turcotte said budgetary documents are "subject to a high degree of uncertainty."

"As such, it should not be viewed as a prediction of the future," she claimed.

In Budget 2023, Finance Minister Chrystia Freeland claimed her government would cut spending by $14 billion through internal cuts to travel and other perks.https://t.co/zLcy0oUkj9

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Despite the commitment to reduce government spending, Parliament has not balanced a budget since 2007, according to Blacklock's Reporter. In 2021, the federal debt surpassed the $1 trillion mark. 

Last year marked the third highest federal per-person debt at $47,070 — behind only 2020 and 2021 — 25% higher than before the pandemic.

"Canada's in a full-blown economic growth crisis, which is homegrown and due largely to poor government policy," said Philip Cross, a senior fellow at the Fraser Institute.

"The federal government can't blame COVID because the slow growth began before the pandemic."

During Prime Minister Justin Trudeau's tenure, federal per-person debt increased by 35.3% between 2015 and 2022, increasing national debt per Canadian from $34,791 to $47,070 (inflation-adjusted). 

“Prime Minister Trudeau’s government has increased per-person debt by 35.3 per cent since 2015, the third highest amount since World War II,” a new study found.

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Compared to post-World War II prime ministers who experienced recessions, only Pierre Trudeau (58.8%) and Brian Mulroney (42.5%) increased the per-person debt more than the current government.

Additionally, Canada's per-person GDP is growing at its slowest rate since the Great Depression.

Per-person GDP, the value of goods and services per Canadian, is a common measure of prosperity. From 2013 to 2022, per-person GDP in Canada grew by a dismal 0.8% (after adjusting for inflation).

This is a "Canadian-made problem" rooted in declining business investment and stagnating growth in exports, two critical sectors of the economy, said the Institute.

Specifically, the value of business investment in the fourth quarter of 2022 ($189.8 billion) fell 17.6% lower than the end of 2014 (after adjusting for inflation). The value of exports also flatlined over the same period. 

"If policymakers want to increase economic growth and attract investment, they should enact pro-growth policies and encourage entrepreneurship," said Cross.