“Canadians are paying too much tax because the government wastes too much money,” said Franco Terrazzano, Federal Director of the CTF. “If Finance Minister Chrystia Freeland's spending wasn't over budget, she could provide meaningful tax relief and still lower the deficit.”
After several expensive pandemic relief programs, the Liberals appear to be practicing fiscal discipline and taking steps to reduce budget deficits.
The fiscal update showed the federal government spent $20.2 billion over budget this fiscal year.
Budget 2022 released in April projected spending to be $452.3 billion this year. The fiscal update projected $472.5 billion in spending.
“Canadians can't afford gasoline or groceries because the government is spending like crazy and raising taxes,” said Terrazzano. “Freeland must stop wasting so much money and cut taxes now.”
Instead, Freeland, who also serves as deputy prime minister, advised Canadian families to look closely at their expenses and cut their Disney+ Subscription.
“Every mother in Canada is doing that right now,” said Freeland. “We're saving only $13.99 a month, but every little bit helps.”
According to the Parliamentary Budget Officer's revenue calculator, reducing the GST by one percentage point would reduce the government's revenue by about $9 billion. That means Freeland could cut the sales tax from five to three percent and still lower the deficit by keeping spending at April's budgeted levels.
"Instead of giving some Canadians some money back through rebates, Freeland could provide meaningful relief to all Canadians by cutting the GST," added Terrazzano. “The government could make life more affordable by cutting the sales tax.”
The recent fiscal update amended this year's deficit to $36.4 billion — lower than anticipated in 2022's budget. The deficit fell from $52.8 billion, with the Trudeau Liberals declaring an additional $37.5 billion since the budget tabling.
The fiscal update also projects a balanced budget eventually due to an extra $129.1 billion in revenue since the beginning of this fiscal year.
“The government received a boatload of extra cash from taxpayers and is still racking up more credit card bills,” continues Terrazzano.
He warned the Trudeau Liberals to cease borrowing so much money before interest charges “tear a bigger hole in the budget.” Interest charges will cost taxpayers $35 billion this year alone.
“That's billions that can't be used to improve services or lower taxes because it's going to the bond fund managers on Bay Street,” said Terrazzano. Debt interest charges will cost taxpayers $34.7 billion. That's $7.8 billion more than the budget projected.
Yet, with the recent fiscal update, the Trudeau Liberals project a $4.5 billion surplus in 2027-28.
Despite claims from Freeland that they will balance the budget in 2027, Terrazzano said taxpayers shouldn't buy another broken promise. According to him, “PBO numbers project 2027 revenues to be $11.1 billion lower, and interest charges $2.8 billion higher than the fiscal update.”
“That means a $9.4-billion deficit in 2027.”
According to supplementary data released by the Parliamentary Budget Officer in its June Fiscal Sustainability Report last year, Canada will not return to a balanced budget until 2070 under the status quo.
The PBO projects another $2.7 trillion in debt before balancing the budget in 2070, in addition to the current $1 trillion in existing federal debt.
Interest charges will cost taxpayers about $3.8 trillion by 2070, should that be the case.