Deputy Prime Minister and Finance Minister Chrystia Freeland will release the Liberal government’s fall fiscal update next Monday. Many financial observers are hopeful Freeland will (finally) come clean on the size of last year’s federal deficit.
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Not this year’s deficit, last year’s. (This year’s deficit is going to be even larger, but we’ll be lucky to see it before next fall’s federal election.)
The 2023-24 deficit figure is already several months late. Not that that’s unusual for the Liberals. The Trudeau government once went two years and one month between federal budgets, the longest gap in Canada’s history.
They’re just not serious fiscal managers.
It’s clear Freeland is sitting on bad news, which explains her reluctance to give up the figures.
In her 2023 budget, Freeland promised last year’s deficit would be no bigger than $40.1 billion, which is staggering enough. Back in October, though, parliamentary budget officer (PBO) Yves Giroux put the 2023-24 deficit at $46.4 billion – 16% higher than Freeland’s pledge.
The bigger point is: This government quite simply cannot control spending. It piles billions in expenditures on top of billions more, then sheepishly tries to avoid admitting it hasn’t a clue how much of your money it’s thrown away.
And 2024-25 (the fiscal year that will end next March) is going to be much worse.
The PBO believes the Liberals have spent more money than they had at this time last year. Freeland pledged the 2024-25 deficit would be “only” $39.8 billion, but already several leading Canadian banks are projecting closer to $50 billion.
The National Bank of Canada said in a newsletter in late November, “Barring any yet-to-be announced revenue measures … the current year’s deficit could exceed $50 billion,” particularly if the Liberals send out all those $250 bribes … uh, er … “affordability cheques” to working Canadians before the end of the fiscal year next March 31.
The Liberals have even botched the calculations of the cost of their GST holiday, which is further proof of how incompetent they are.
All along they have claimed the amount of lost revenue from their two-month GST holiday would be $1.6 billion. However, the federal Finance department genuinely seems to have forgotten that Ottawa has harmonized sales tax (HST) agreements with five provinces (Ontario and the four Atlantic provinces). If Ottawa makes changes to the GST that reduce the provincial portion of HST, then the feds are required to make up the difference.
The GST holiday will likely end up costing the Trudeau government $2.9 billion instead of $1.6 billion because no one in the federal government thought to consult any of the provinces before announcing the holiday.
And while the $250 cheques are slated to cost a further $5 billion, that sum could go much higher if the NDP succeeds in pressuring the Liberals to send the payments to an even broader range of Canadians.
It is not unrealistic to think the 2024-25 deficit could come in closer to $60 billion, simply because the Trudeau government can’t stop spending.
Unbelievably, Freeland said Monday at the Commons industry committee that it was very important for opposition MPs to stop questioning cabinet’s ability to manage government debt and deficits. Apparently, she believes their critiques are harming Canada’s reputation in international markets.
Huh!?
They’re called the opposition (not the sycophants) for a reason. And in case Freeland doesn’t know, all the banks, investment houses and pension funds conduct their own independent research on Canada’s finances and already know what a mess we’re in.
In her spring budget, Freeland said the government’s aim was to give Canadians under 40 “a fair chance at a middle-class life.” Does this sound like a recipe for that?