Justin Trudeau’s Liberals are fiddling while Canada burns. And Jagmeet Singh’s New Democrats are performing as their backup musicians.
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The Liberals are obsessed with getting their gimmicky GST holiday passed. At the same time, on Nov. 29, Statistics Canada announced that for the sixth consecutive quarter (and the eighth quarter in the last nine), Canada’s per-capita Gross Domestic Product declined.
The GDP decline is the far bigger problem. It’s the national fire. A country that is in economic decline cannot afford all its fancy social programs such as health care and pensions.
So what are the Liberals doing about that? Nothing.
Are they cutting spending so the public sector doesn’t suck as much energy out of the economy? Don’t be silly.
Are they lowering taxes, such as the income tax or carbon tax, in a meaningful way so public spending doesn’t crowd out personal spending? Nope.
In the spring budget, the Liberals projected this year’s deficit would be in the neighbourhood of $40 billion. Now it’s almost certainly at $50 billion, with four more months to go in the budget year. On top of which they’re thinking of adding $6 billion to pay for their two-month GST hiatus and their $250 cheques to working Canadians (but likely not seniors, the self-employed or small businesspeople).
The Liberals’ backup fiddlers – the New Democrats – are demanding even more spending. So, by the end of March, expect this year’s deficit to be nearer $60 billion.
That kind of out-of-control spending puts huge upward pressure on inflation — more pressure than the GST forgiveness can relieve.
There’s an excellent chance the Liberals’ scheme to give Canadians temporary relief from the high cost of living will end up raising the cost.
Borrowing less money might help the Liberals put out the fire threatening our economy. Will they borrow less so the Bank of Canada can continue to bring down interest rates? Not a hope.
If you have to refinance your mortgage in the coming months and the interest rate goes up, blame it on the inflationary pressure caused by Trudeau’s GST gimmick.
I’m sure as you’ve laid awake nights, wondering how you were going to afford food for your family AND activities for the kids AND repairs to your car AND a new mortgage, the thought never once came to your head, “Gee, I sure wish the federal Liberals would remove the GST on beer until the middle of February. That would be a big help.”
Using 1995 as a base, Canada’s per-capita GDP is now only 35% higher than it was 30 years ago; the Americans’ is 63% higher. And since the Trudeau Liberals came to office in 2015, our per-capita wealth has barely budged. It’s up under five percentage points, while the Americans’ has risen 25 points.
Over the past nine years, America’s per-capita GDP has risen five times faster than ours, largely for two reasons. Their federal governments during that period have not been as anti-business, anti-investment as the Trudeau Liberals. And they have allowed in nowhere near as many legal immigrants as we have – immigrants who need housing, jobs, health care and other benefits.
They have a bigger pie but have grown the number competing for a slice more slowly.
A side effect of the GST gimmick will be a huge cost to businesses; it will be felt especially by small businesses.
They will have to recalculate every item on which they must still collect GST and every item on which they no longer do. Then at the end of 60 days, they’ll have to go right back to collecting GST on the things they do now.
That will eat away any increased business income they might have earned from Canadians spending their GST savings.
Fiddle, Mr. Trudeau. Fiddle.