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Economic update: Still nothing to help tame inflation

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From the Montreal Economic Institute

The Trudeau government has missed an opportunity to help the Bank of Canada fight inflation in its latest economic update, says a researcher at the Montreal Economic Institute.

“With the Bank of Canada asking it for help to tame inflation, the Trudeau government is adding fuel to the fire,” says Gabriel Giguère, public policy analyst at the MEI. “Ultimately, Canadians are seeing the effects in the high prices they’re paying at the grocery store and in their rapidly rising mortgage payments.”

In October, Bank of Canada Governor Tiff Macklem asked the various levels of government to reduce spending growth in order to help in the fight against inflation.

Government spending in recent years is directly responsible for a two-percentage-point increase in interest rates according to a Scotiabank report released on Friday. The federal government alone is responsible for 1.1 percentage points of this increase.

The update tabled today does not contain a plan for returning to budgetary balance. It instead proposes a $35.9 billion increase in the cumulative deficit by 2027-28, compared to what had been announced in the budget this past March.

The Trudeau government now expects interest payments on its debt to total $46.5 billion this year, representing an increase of $2.6 billion compared to last March’s projections.

“Besides inflation, there is the issue of interest rates that should encourage the Trudeau government to stop increasing its deficits,” explains Mr. Giguère. “After all, each dollar spent on interest payments is a dollar that is not put into healthcare, education, or tax cuts.”

The government expects to spend $58.4 billion on interest payments on its debt in 2027-2028, or $1,456 per Canadian.

The federal debt will reach $1.2 trillion on March 31 of next year, according to the Department of Finance’s projections.

In addition, the MEI researcher criticizes the government’s decision to modify the tax treatment of the expenses of owners of short-term rental apartments.

“It’s not as if we’re a handful of Airbnbs away from solving Canada’s housing shortage,” explains Mr. Giguère. “Any solution that does not involve a massive increase in the housing supply is unfortunately just a distraction.”

The country would need 5.1 million housing units built by 2030 in order to return to 2004 price levels, according to Canada Mortgage and Housing Corporation estimates.

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The MEI is an independent public policy think tank with offices in Montreal and Calgary. Through its publications, media appearances, and advisory services to policy-makers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.

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Salary costs in Prime Minister’s Office increase under Trudeau

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From the Canadian Taxpayers Federation

By Ryan Thorpe 

Like all areas of Ottawa’s ballooning bureaucracy, the cost and size of the Prime Minister’s Office has increased under the Trudeau government.

The inflation-adjusted cost of staffing the PMO has risen by 16 per cent under the watch of Prime Minister Justin Trudeau, according to access-to-information records obtained by the Canadian Taxpayers Federation.

Salary costs for the 103 staffers in the PMO came to $10.5 million in 2022-23. That figure does not represent overall compensation for PMO staff (including benefits), but rather base salary, according to the records.

Taxpayers are now on the hook for an additional $3.2 million in annual PMO salary costs over 2014-15, the last full year former prime minister Stephen Harper was in office.

“The cost of running the PMO has increased under Trudeau, but it’s a good bet most Canadians don’t think they’re getting any better performance from the prime minister,” said Franco Terrazzano, CTF Federal Director. “If Trudeau can’t find savings right under his nose, how can taxpayers trust him to cut the fat across government?”

The growth in PMO staff comes at a time when the Trudeau government has been ballooning the federal bureaucracy across the board.

Both the number and cost of the federal bureaucracy has exploded under Trudeau’s watch, according to other government records obtained by the CTF.

The number of federal bureaucrats increased by 42 per cent under Trudeau, with more than 108,000 new bureaucrats added to the government payroll.

Spending on federal bureaucrats hit a record high $67.4 billion in 2022-23, representing a 68 per cent increase since 2016.

The size of the federal c-suite has also expanded, with the number of executives increasing by 42 per cent under Trudeau.

The Trudeau government has handed out more than $1 billion in bonuses since 2015 and more than one million pay raises in the last four years.

Meanwhile, spending on consultants also reached a record high, with planned expenditures for 2023-24 sitting at $21.6 billion.

“Everywhere you look – the PMO, the federal c-suite, the bureaucracy – the cost and size of government is out of control,” Terrazzano said. “Trudeau must take air out of Ottawa’s ballooning bureaucracy and the place to start is his own office.”

PMO staff costs, government records obtained by the CTF

Fiscal year

Number of PMO staff

PMO salary costs

2014-15

94

$7,258,436

2015-16

74

$6,353,188

2016-17

84

$7,462,686

2017-18

99

$8,155,068

2018-19

100

$8,479,353

2019-20

90

$8,536,672

2020-21

99

$9,840,834

2021-22

94

$9,383,328

2022-23

103

$10,536,649

Total

$76,006,214

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Parks Canada right to back down from deer-cull boondoggle

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From the Canadian Taxpayers Federation

By Carson Binda 

Taxpayers are glad to see Parks Canada backing away from a $12-million deer cull on Sidney Island.

“Parks Canada’s plan to blow $12-million on a deer cull was ridiculous from day one,” said Carson Binda, B.C. Director for the Canadian Taxpayers Federation. “Parks Canada is right to cancel the project, but it’s worrying that it took them this much wasted money to figure it out.”

Parks Canada used so-called sharpshooters in helicopters, firing down on invasive fallow deer from above, during phase one of the cull which occurred last December. The so-called sharpshooters killed 84 deer, but only 63 were the correct species. The cost for phase one came in at $834,000, roughly $10,000 per deer.

Subsequently, Parks Canada erected fencing made of fish nets around the 12-square-kilometer Island to trap the deer, in anticipation for a second round of culls which were scheduled for Nov. 15.

Several animals became entangled in the netting, painfully thrashing themselves to death.

“Seeing deer thrashing to death because of bureaucratic incompetence is heartbreaking,” Binda said. “Parks Canada needs to explain how this happened and how much taxpayer cash was wasted on this project before the cancellation.”

Residents of Sidney Island and local hunters have been culling deer on the island for years, for free. Last fall 54 deer were culled by local hunters at no cost to the taxpayer.

“Local hunters filling their freezers at no cost to the taxpayer is obviously better than Parks Canada blowing millions of dollars to shoot the wrong deer from helicopters and leaving others to suffer in a net,” Binda said. “Hopefully the bureaucrats learn from their mistakes with this boondoggle.”

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