Freeland tables fiscal update with no plan to balance the budget

Noticeably absent from the fiscal update is significant tax relief and a plan to balance the budget, according to the Canadian Taxpayers Federation. The national debt will grow to $1.2 trillion by the end of 2023. Meanwhile debt servicing costs will account for about 10 cents on every dollar of deficit spending — costing $52.4 billion a year. Next year, it will rise to $53.3 billion and approach $60 billion by 2027 — double Canada’s annual military budget.

Freeland tables fiscal update with no plan to balance the budget
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The Trudeau Liberals have tabled another fiscal update that puts Canada’s finances deeper in the hole, according to the Canadian Taxpayers Federation (CTF).

Finance Minister Chrystia Freeland told the House of Commons Tuesday their aim is to maintain deficit spending at $40.1 billion and reduce the debt-to-GDP ratio in fiscal year 2024/25. That includes keeping deficit spending below one percent of the GDP starting in 2026/27.

Yet the budget update pegs spending to increase to $488.7 billion from $473.5 billion last year. It announced an additional $15.7 billion in new spending over the next six years, despite promising $2.5 billion in public sector cuts.

"We are making a conscious decision to avoid pouring fuel on the fire of inflation," said Freeland. "Our economic plan is working."

Though likely to fall on deaf ears, the CTF once again urged the feds to rein in spending and cut taxes.

"This is the first time this government is starting to recognize reality, but spending is still billions higher than last year, and the deficit is bigger," said CTF Federal Director Franco Terrazzano.

"Taxpayers are losing out on almost $4 billion every month that can’t be used to improve services or lower taxes," he added. "That money is going to the bond fund managers just to cover the government’s debt interest charges."

The debt will grow to $1.2 trillion by the end of 2023. Interest on the debt will cost $46.5 billion this year.

Noticeably absent from the fiscal update is significant tax relief and a plan to balance the budget, according to the CTF.

"The budget update is an admission that the government has a spending problem," said Terrazzano, "but Trudeau still isn’t serious about managing our finances or providing real tax relief," he added.

Despite preaching austerity, the minister continues to spend lavishly on EV battery factories, childcare and housing assistance for renters. 

Meanwhile debt servicing costs will account for about 10 cents on every dollar of deficit spending — costing $52.4 billion a year. Next year, it will rise to $53.3 billion and approach $60 billion by 2027 — double Canada’s annual military budget.

Conservative leader Pierre Poilievre condemned the federal government for its out-of-control spending that he attributes to interest rate spikes.

He lamented higher taxes, including the carbon tax for adversely impacting $900 billion worth of mortgages that are set to renew in three years. 

"Trudeau won’t even do the simple things to save taxpayers money like ending his undemocratic alcohol tax escalator or taking the carbon tax off everyone’s home heating bills," said Poilievre, noting the Conservatives will vote against the budget.

"A year ago, this finance minister told her how she had the budget balanced by the year 2028. In that time, she has announced $100 billion of additional debt above and beyond having doubled that debt in the first place," he added.

"And now, her solution, another $20 billion of inflationary spending," said Poilievre, noting the Bank of Canada Governor attributed deficits to adding two full percentage points to mortgage rates "on the backs of Canadians."

In her speech, Freeland claimed the Conservatives had it wrong and that the country is not falling apart.

"Building a Canada that delivers on the promise of the greatest country in the world will be our work for these next two years — and beyond," she said.

"Canada is not and has never been broken," claimed the minister. "We are the imperfect but remarkable creation of generations of Canadians who did their part to build a better country — in good times and in tough times, calloused hand by calloused hand."

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