Business
Budget update proves Trudeau isn’t serious about federal finances
From the Canadian Taxpayers Federation
Author: Franco Terrazzano
“when you pay the GST on a hockey stick, a tank of gas or bar of soap, every penny will go to interest charges on the federal debt. In fact, interest charges will surpass federal health-care transfers next year”
Taxpayers should brace for impact based on the finance minister’s latest projections.
Interest charges on the federal debt will go from $47 billion this year to $61 billion in 2028-29, according to the budget update.
But what does $61 billion mean to you?
Sixty-one billion is the same amount the government plans to collect with the GST in 2028-29.
So, in a few short years, when you pay the GST on a hockey stick, a tank of gas or bar of soap, every penny will go to interest charges on the federal debt.
In fact, interest charges will surpass federal health-care transfers next year.
Let the shock sink in just a little deeper: what could we do if it weren’t for the federal debt?
We could virtually double federal health spending.
Or we could completely eliminate the GST in a couple years.
Somehow the government is communicating these perplexing projections with considerable calmness.
Finance Minister Chrystia Freeland claims “the foundation of our Fall Economic Statement is our responsible fiscal plan.”
But last year the government spent $474 billion. And this year the feds plan on spending $489 billion. By 2029, the government will be spending $595 billion a year.
Pro-tip for Freeland: when you spend billions of dollars more every year, you’re saving money wrong.
And all that spending comes on top of an already ballooned base line. Even before the pandemic, the Trudeau government was spending all-time highs. And that’s after accounting for inflation and population differences.
Last year’s $35-billion deficit will increase to $40 billion this year. The feds have no plan to balance the budget. And that’s pushing up interest charges.
Again, brace yourself, because in 2028, federal debt interest charges will cost taxpayers $61 billion. For context, pre-pandemic interest charges were around $20 billion a year.
Meanwhile, if you’re hoping for meaningful tax relief from this government, you shouldn’t hold your breath.
“I absolutely understand that after three difficult years – with a global pandemic, global inflation, and global interest rate hikes – Canadians are worn out, frustrated, and feeling the squeeze,” Freeland said. “What Canadians deserve today is for us to address the very real pain that so many are feeling.”
The easiest and simplest way for Freeland to help Canadians is to stop taking so much money from taxpayers’ wallets in the first place.
But Freeland and Prime Minister Justin Trudeau aren’t even willing to provide the simplest forms of tax relief like ending the sales tax-on-tax at the gas pumps. The GST on the carbon tax alone will cost taxpayers $429 million this year.
The government isn’t willing to end the anti-democratic escalator that increases alcohol taxes every year without a single vote in Parliament. Next year’s hike will cost taxpayers about $100 million.
The government isn’t even willing to extend the same relief to all Canadians that it gave Atlantic Canadian families and remove the carbon tax from everyone’s home heating bills. The carbon tax on natural gas will cost the average family $300 this year.
The budget update is an admission that the government has a spending problem, but it still isn’t serious about managing our finances or providing real tax relief.
The solution for Trudeau and Freeland should be simple: put down the credit card and pick up some scissors.
This column was originally published in the Toronto Sun on Nov. 24, 2023.
armed forces
Top Brass Is On The Run Ahead Of Trump’s Return
From the Daily Caller News Foundation
By Morgan Murphy
With less than a month to go before President-elect Donald Trump takes office, the top brass are already running for cover. This week the Army’s chief of staff, Gen. Randy George, pledged to cut approximately a dozen general officers from the U.S. Army.
It is a start.
But given the Army is authorized 219 general officers, cutting just 12 is using a scalpel when a machete is in order. At present, the ratio of officers to enlisted personnel stands at an all-time high. During World War II, we had one general for every 6,000 troops. Today, we have one for every 1,600.
Right now, the United States has 1.3 million active-duty service members according to the Defense Manpower Data Center. Of those, 885 are flag officers (fun fact: you get your own flag when you make general or admiral, hence the term “flag officer” and “flagship”). In the reserve world, the ratio is even worse. There are 925 general and flag officers and a total reserve force of just 760,499 personnel. That is a flag for every 674 enlisted troops.
The hallways at the Pentagon are filled with a constellation of stars and the legions of staffers who support them. I’ve worked in both the Office of the Secretary of Defense and the Joint Chiefs of Staff. Starting around 2011, the Joint Staff began to surge in scope and power. Though the chairman of the Joint Chiefs is not in the chain of command and simply serves as an advisor to the president, there are a staggering 4,409 people working for the Joint Staff, including 1,400 civilians with an average salary of $196,800 (yes, you read that correctly). The Joint Staff budget for 2025 is estimated by the Department of Defense’s comptroller to be $1.3 billion.
In contrast, the Secretary of Defense — the civilian in charge of running our nation’s military — has a staff of 2,646 civilians and uniformed personnel. The disparity between the two staffs threatens the longstanding American principle of civilian control of the military.
Just look at what happens when civilians in the White House or the Senate dare question the ranks of America’s general class. “Politicizing the military!” critics cry, as if the Commander-in-Chief has no right to question the judgement of generals who botched the withdrawal from Afghanistan, bought into the woke ideology of diversity, equity and inclusion (DEI) or oversaw over-budget and behind-schedule weapons systems. Introducing accountability to the general class is not politicizing our nation’s military — it is called leadership.
What most Americans don’t understand is that our top brass is already very political. On any given day in our nation’s Capitol, a casual visitor is likely to run into multiple generals and admirals visiting our elected representatives and their staff. Ostensibly, these “briefs” are about various strategic threats and weapons systems — but everyone on the Hill knows our military leaders are also jockeying for their next assignment or promotion. It’s classic politics
The country witnessed this firsthand with now-retired Gen. Mark Milley. Most Americans were put off by what they saw. Milley brazenly played the Washington spin game, bragging in a Senate Armed Services hearing that he had interviewed with Bob Woodward and a host of other Washington, D.C. reporters.
Woodward later admitted in an interview with CNN that he was flabbergasted by Milley, recalling the chairman hadn’t just said “[Trump] is a problem or we can’t trust him,” but took it to the point of saying, “he is a danger to the country. He is the most dangerous person I know.” Woodward said that Milley’s attitude felt like an assignment editor ordering him, “Do something about this.”
Think on that a moment — an active-duty four star general spoke on the record, disparaging the Commander-in-Chief. Not only did it show rank insubordination and a breach of Uniform Code of Military Justice Article 88, but Milley’s actions represented a grave threat against the Constitution and civilian oversight of the military.
How will it play out now that Trump has returned? Old political hands know that what goes around comes around. Milley’s ham-handed political meddling may very well pave the way for a massive reorganization of flag officers similar to Gen. George C. Marshall’s “plucking board” of 1940. Marshall forced 500 colonels into retirement saying, “You give a good leader very little and he will succeed; you give mediocrity a great deal and they will fail.”
Marshall’s efforts to reorient the War Department to a meritocracy proved prescient when the United States entered World War II less than two years later.
Perhaps it’s time for another plucking board to remind the military brass that it is their civilian bosses who sit at the top of the U.S. chain of command.
Morgan Murphy is military thought leader, former press secretary to the Secretary of Defense and national security advisor in the U.S. Senate.
Business
For the record—former finance minister did not keep Canada’s ‘fiscal powder dry’
From the Fraser Institute
By Ben Eisen
In case you haven’t heard, Chrystia Freeland resigned from cabinet on Monday. Reportedly, the straw that broke the camel’s back was Prime Minister Trudeau’s plan to send all Canadians earning up to $150,000 a onetime $250 tax “rebate.” In her resignation letter, Freeland seemingly took aim at this ill-advised waste of money by noting “costly political gimmicks.” She could not have been more right, as my colleagues and I have written here, here and elsewhere.
Indeed, Freeland was right to excoriate the government for a onetime rebate cheque that would do nothing to help Canada’s long-term economic growth prospects, but her reasoning was curious given her record in office. She wrote that such gimmicks were unwise because Canada must keep its “fiscal powder dry” given the possibility of trade disputes with the United States.
Again, to a large extent Freeland’s logic is sound. Emergencies come up from time to time, and governments should be particularly frugal with public dollars during non-emergency periods so money is available when hard times come.
For example, the federal government’s generally restrained approach to spending during the 1990s and 2000s was an important reason Canada went into the pandemic with its books in better shape than most other countries. This is an example of how keeping “fiscal powder dry” can help a government be ready when emergencies strike.
However, much of the sentiment in Freeland’s resignation letter does not match her record as finance minister.
Of course, during the pandemic and its immediate aftermath, it’s understandable that the federal government ran large deficits. However, several years have now past and the Trudeau government has run large continuous deficits. This year, the government forecasts a $48.3 billion deficit, which is larger than the $40 billion target the government had previously set.
A finance minister committed to keeping Canada’s fiscal powder dry would have pushed for balanced budgets so Ottawa could start shrinking the massive debt burden accumulated during COVID. Instead, deficits persisted and debt has continued to climb. As a result, federal debt may spike beyond levels reached during the pandemic if another emergency strikes.
Minister Freeland’s reported decision to oppose the planned $250 onetime tax rebates is commendable. But we should be cautious not to rewrite history. Despite Freeland’s stated desire to keep Canada’s “fiscal powder dry,” this was not the story of her tenure as finance minister. Instead, the story is one of continuous deficits and growing debt, which have hurt Canada’s capacity to withstand the next fiscal emergency whenever it does arrive.
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