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Economy

Proclaiming your government ‘fiscally responsible’ does not make it so

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From the Fraser Institute

By Jake Fuss and Grady Munro

The government planned to spend $478.6 billion in 2024/25 and run a deficit of $27.8 billion. Its latest forecast, however, shows a larger deficit of $38.4 billion despite revenues being $32.6 billion higher than anticipated.

The Trudeau government will table its next federal budget on April 16. Before and after budget day, Canadians should be wary of carefully crafted and overly positive government rhetoric, which may bear little resemblance to the actual state of Ottawa’s finances and the government’s fiscal track record.

For example, federal Finance Minister Chrystia Freeland recently said the government plans “to invest in Canadians… in a fiscally responsible way.” At first glance, these comments seem reasonable. But consider the Trudeau government’s record on spending, deficits and debt over the last nine years.

Since taking office in 2015, the Trudeau government has demonstrated a proclivity to spend and borrow at nearly every turn. From 2018 to 2022, the Trudeau government recorded the five highest levels of federal spending per person (excluding debt interest costs) in Canadian history (inflation-adjusted). Recent projections from the government suggest it will possess the eight highest levels of per-person spending by the end of its current term next fall.

This repeated preference to turn on the spending taps has resulted in nine consecutive budget deficits, with federal debt reaching $2.0 trillion at the end of March 2024. Rapid debt accumulation means each Canadian was responsible for paying $1,160 in federal debt interest costs in 2023/24 alone and the government will likely need to raise taxes in the future.

The government also plans to continue running larger deficits than it did before COVID and borrow nearly $500 billion more by 2028/29.

To make matters worse, we can’t put much stock in their fiscal plans, as spending and deficits are almost always higher than government forecasts. Two years ago, for example, the government planned to spend $478.6 billion in 2024/25 and run a deficit of $27.8 billion. Its latest forecast, however, shows a larger deficit of $38.4 billion despite revenues being $32.6 billion higher than anticipated. A failure to restrain spending means the government now expects total spending to be $521.8 billion in 2024/25.

None of this points to any semblance of fiscal responsibility.

Ontario’s Finance Minister Peter Bethlenfalvy has made similar erroneous claims. When tabling that province’s budget last month, he said his fiscal plan, which includes a $9.8 billion deficit in 2024/25 and $59.7 billion in debt over three years, was a “prudent, responsible approach.”

Despite paying lip service to their strong stewardship of government finances, Minister Bethlenfalvy and Premier Doug Ford rarely waste an opportunity to increase spending and burden Ontarians with more debt. From 2017/18 to 2024/25, provincial revenues will have increased by a projected 36.5 per cent, yet the Ford government has more than wiped out these gains by increasing program spending by nearly 41.0 per cent over the same timeframe.

Moreover, Ontario’s per-person inflation-adjusted spending is higher now than it ever was during Kathleen Wynne’s tenure as premier. Due to the Ford government’s decision to post deficits in five of six years, in conjunction with significant spending on infrastructure, provincial debt has increased by close to $92.0 billion since 2017/18.

None of these facts point to a “prudent, responsible approach” to finances at Queen’s Park.

The current governments in both Toronto and Ottawa have remarkably poor track records with spending and debt. Proclaiming yourself to be fiscally responsible does not make it so. It’s time for finance ministers to stop playing word tricks and be honest about their own mismanagement.

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Premiers fight to lower gas taxes as Trudeau hikes pump costs

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From the Canadian Taxpayers Federation

By Jay Goldberg 

Thirty-nine hundred dollars – that’s how much the typical two-car Ontario family is spending on gas taxes at the pump this year.

You read that right. That’s not the overall fuel bill. That’s just taxes.

Prime Minister Justin Trudeau keeps increasing your gas bill, while Premier Doug Ford is lowering it.

Ford’s latest gas tax cut extension is music to taxpayers’ ears. Ford’s 6.4 cent per litre gas tax cut, temporarily introduced in July 2022, is here to stay until at least next June.

Because of the cut, a two-car family has saved more than $1,000 so far. And that’s welcome news for Ontario taxpayers, because Trudeau is planning yet another carbon tax hike next April.

Trudeau has raised the overall tax burden at the pumps every April for the past five years. Next spring, he plans to raise gas taxes by another three cents per litre, bringing the overall gas tax burden for Ontarians to almost 60 cents per litre.

While Trudeau keeps hiking costs for taxpayers at the pumps, premiers of all stripes have been stepping up to the plate to blunt the impact of his punitive carbon tax.

Obviously, Ford has stepped up to the plate and has lowered gas taxes. But he’s not alone.

In Manitoba, NDP Premier Wab Kinew fully suspended the province’s 14 cent per litre gas tax for a year. And in Newfoundland, Liberal Premier Andrew Furey cut the gas tax by 8.05 cents per litre for nearly two-and-a-half years.

It’s a tale of two approaches: the Trudeau government keeps making life more expensive at the pumps, while premiers of all stripes are fighting to get costs down.

Families still have to get to work, get the kids to school and make it to hockey practice. And they can’t afford increasingly high gas taxes. Common sense premiers seem to get it, while Ottawa has its head in the clouds.

When Ford announced his gas tax cut extension, he took aim at the Liberal carbon tax mandated by the Trudeau government in Ottawa.

Ford noted the carbon tax is set to rise to 20.9 cents per litre next April, “bumping up the cost of everything once again and it’s absolutely ridiculous.”

“Our government will always fight against it,” Ford said.

But there’s some good news for taxpayers: reprieve may be on the horizon.

Federal Conservative leader Pierre Poilievre’s promises to axe the carbon tax as soon as he takes office.

With a federal election scheduled for next fall, the federal carbon tax’s days may very well be numbered.

Scrapping the carbon tax would make a huge difference in the lives of everyday Canadians.

Right now, the carbon tax costs 17.6 cents per litre. For a family filling up two cars once a week, that’s nearly $24 a week in carbon taxes at the pump.

Scrapping the carbon tax could save families more than $1,200 a year at the pumps. Plus, there would be savings on the cost of home heating, food, and virtually everything else.

While the Trudeau government likes to argue that the carbon tax rebates make up for all these additional costs, the Parliamentary Budget Officer says it’s not so.

The PBO has shown that the typical Ontario family will lose nearly $400 this year due to the carbon tax, even after the rebates.

That’s why premiers like Ford, Kinew and Furey have stepped up to the plate.

Canadians pay far too much at the pumps in taxes. While Trudeau hikes the carbon tax year after year, provincial leaders like Ford are keeping costs down and delivering meaningful relief for struggling families.

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Bank of Canada admits ‘significant’ number of citizens would resist digital dollar

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From LifeSiteNews

By Anthony Murdoch

A significant number’ of Canadians are suspicious of government overreach and would resist any measures by the government or central bank to create digital forms of official money.

A Bank of Canada study has found that Canadians are very wary of a government-backed digital currency, concluding that “significant number” of citizens would resist the implementation of such a system.

The study, conducted by the Bank of Canada, found that a “significant number” of Canadians are suspicious of government overreach, and would resist any measures by the government or central bank to create digital forms of official money.  

According to results from the BOC’s report titled The Consumer Value Proposition For A Hypothetical Digital Canadian Dollar, “cash remains an important method of payment” for Canadians and “[c]ertain groups may strongly resist a digital dollar if they conflate its launch with the end of cash issuance.” 

The BOC noted that not only would a “significant number” of Canadians “reject” digital money, but that for some “mindset segments, their lack of interest in a hypothetical digital Canadian dollar was heavily influenced by perceptions of government overreach.” 

As reported by LifeSiteNews in September, the BOC has already said that plans to create a digital “dollar,” also known as a central bank digital currency (CBDC), have been shelved. 

The shelving came after the BOC had already forged ahead and filed a trademark for a digital currency, as LifeSiteNews previously reported. 

Officials from Canada’s central bank said that a digital currency, or electronic “loonie,” will no longer be considered after years of investigating bringing one to market.  

However, that does not mean the BOC is still not researching or exploring other options when it comes to digital money. As noted by researchers, despite there being some “interest” in a “hypothetical digital Canadian dollar,” that “interest does not necessarily translate to adoption.” 

“Most participants felt well served by current means of payment,” noted the study, adding, “Individuals who support the issuance of a hypothetical digital Canadian dollar did not imagine themselves using it regularly.” 

“They were skeptical of the need for this new form of money and of its reliability,” read the report, which also noted, “They did not trust that concepts were secure or that their personal information would be kept private.” 

Given the results from the report, the bank concluded that “[b]road early adoption” of a digital dollar “is unlikely given that available payment methods meet the needs of most users.” 

“Financially vulnerable segments often have the most to gain from this payment method but are most resistant to adoption. Important considerations for appeal and adoption potential include universal merchant acceptance, low costs, easy access, simplified online payments, shared payment features, budgeting tools and customizable security and privacy settings,” it noted.  

Digital currencies have been touted as the future by some government officials, but, as LifeSiteNews has reported before, many experts warn that such technology would restrict freedom and could be used as a “control tool” against citizens, similar to China’s pervasive social credit system.  

Most Canadians do not want a digital dollar, as previously reported by LifeSiteNews. A public survey launched by the BOC to gauge Canadians’ taste for a digital dollar revealed that an overwhelming majority of citizens want to “leave cash alone” and not proceed with a digital iteration of the national currency.  

The BOC last August admitted that the creation of a CBDC is not even necessary, as many people rely on cash to pay for things. The bank concluded that the introduction of a digital currency would only be feasible if consumers demanded its release.  

In August, LifeSiteNews also reported that the Conservative Party is looking to gather support for a bill that would outright ban the federal government from ever creating a digital currency and make it so that cash is kept as the preferred means of settling debts.    

Conservative leader Pierre Poilievre promised that if he is elected prime minister, he would stop any  implementation of a “digital currency” or a compulsory “digital ID” system.  

Prominent opponents of CBDCs have been strongly advocating that citizens use cash whenever possible and boycott businesses that do not accept cash payments as a means of slowing down the imposition of CBDCs.  

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