Business
Prime minister rejects ‘austerity’ despite massive debt and dismal economic growth
From the Fraser Institute
By Grady Munro and Jake Fuss
Adjusting for population growth and inflation, the Trudeau government has recorded the five-highest years (2018-2022) of per-person spending in Canadian history, and is on track to record a sixth.
This week, at the Liberal cabinet retreat in Montreal, Prime Minister Justin Trudeau told reporters he’s against “austerity and cuts” and believes his government must “invest” to “create greater growth” in the economy, thus dashing hopes for any meaningful spending restraint in the upcoming federal budget.
But evidence shows the government’s current plan has not helped the economy despite the prime minister’s claims. Rather than double-down on a failed strategy of higher spending, taxes and borrowing, the Trudeau government should change direction immediately.
Let’s look at the evidence.
According to its latest fiscal projections, the federal government will spend $449.8 billion on programs and services in 2023/24—up 75.5 per cent (nominally) from 2014/15 when program spending was $256.2 billion. Adjusting for population growth and inflation, the Trudeau government has recorded the five-highest years (2018-2022) of per-person spending in Canadian history, and is on track to record a sixth. But have we seen a corresponding increase in economic growth?
No, in fact Canada has experienced an economic growth crisis for the last decade.
One of the best ways to measure economic growth is to use inflation-adjusted per-person gross domestic product (GDP), which provides the broadest measure of living standards for Canadians. According to a recent study by Philip Cross, former chief economic analyst at Statistics Canada, between 2013 and 2022 Canada’s per-person GDP (inflation-adjusted) grew at its slowest pace since the 1930s. Moreover, economic growth in Canada has fallen well behind growth in the United States, showing that Canada’s stagnation was not inevitable.
And there’s little room for optimism. According to OECD estimates, Canada will have the slowest growth in per-person GDP among advanced economies from 2020 to 2030 and 2030 to 2060.
Simply put, the data show that increased government spending has not produced greater prosperity for Canadians.
Indeed, rather than “invest” in Canadians, the Trudeau government has burdened Canadians with mountains of debt. The Trudeau government has yet to balance the budget, despite campaign promises, and this year will likely run its ninth consecutive deficit. Nearly a decade of uninterrupted deficits has increased the federal debt by $941.9 billion. This not only imposes costs on Canadians today—primarily through higher debt interest costs—but also increases the tax burden on future generations who are ultimately responsible for paying off today’s debt.
If the Trudeau government needs a blueprint for reform, it can find it within its own party, which has a history of spending reductions and strong economic growth.
During the mid-1990s, the Chrétien Liberal government introduced meaningful spending reductions that ultimately balanced the federal budget in 1997, marking the first federal budget surplus in nearly 30 years. In addition to spending reductions, the Chrétien government also introduced tax relief and other growth-enhancing policies. And the results were immediate.
Between 1997 and 2007, Canada’s average annual increase in per-person GDP (inflation-adjusted) was 2.2 per cent, which was higher than the OECD average. During the same time period, Canada’s average rate of employment growth was nearly double the average in the OECD and the United States. And the national poverty rate fell from 7.8 per cent in 1996 to 4.9 per cent in 2004. Overall, the Canadian economy outperformed many other industrialized economies during this time and living standards improved for Canadians—despite reductions in government spending.
Despite claims by Prime Minister Trudeau, less government spending (not more) is necessary to help reverse the trend of stagnant economic growth. The Trudeau government should recognize that the current plan isn’t working and change course in its upcoming budget.
Authors:
Business
Taxpayers release Naughty and Nice List
From the Canadian Taxpayers Federation
CBC President and CEO Catherine Tait tops the Taxpayer Naughty List for dishing out executive bonuses that cost more than the average Canadian worker makes in a year.
“Santa doesn’t like it when girls and boys are greedy, and forcing struggling taxpayers to pay for Santa-sized executive bonuses is as greedy as it gets,” said Franco Terrazzano, CTF Federal Director. “And Canadian diplomats are on the Naughty List too because Santa likes eggnog as much as the next guy, but even he knows Global Affairs Canada is sipping on a little too much Christmas spirit.
“For billing taxpayers $51,000 a month on booze, Global Affairs Canada bureaucrats find themselves on Santa’s Naughty List.”
Ontario Premier Doug Ford made the Taxpayer Naughty List for extending political welfare after promising to scrap it. And for breaking his promise to cap property tax increases, Winnipeg Mayor Scott Gillingham is also on the Naughty List.
For resigning over wasteful spending and saving taxpayers’ money in the process, former Kensington mayor Rowan Caseley tops the Taxpayer Nice List. Newfoundland and Labrador Premier Andrew Furey also made the Nice List for cutting gas taxes and fighting the federal carbon tax.
“Santa is getting hammered by carbon tax bills on his reindeer barn, so Prime Minister Justin Trudeau lands on the Naughty List for making everything more expensive with his carbon tax,” said Kris Sims, CTF Alberta Director. “Alberta Premier Danielle Smith and Saskatchewan Premier Scott Moe made Santa’s good books for taking action against Trudeau’s carbon tax.”
You can find the entire 2024 Taxpayer Naughty and Nice List here.
Taxpayer Naughty List:
- CBC President & CEO Catherine Tait
- Prime Minister Justin Trudeau
- Ontario Premier Doug Ford
- Global Affairs Canada
- Winnipeg Mayor Scott Gillingham
- The entire federal bureaucracy
Taxpayer Nice List:
- Former Kensington Mayor Rowan Caseley
- Saskatchewan Premier Scott Moe
- Newfoundland and Labrador Premier Andrew Furey
- Alberta Premier Danielle Smith
- Parliamentary Budget Officer Yves Giroux
Business
Biden announces massive new climate goals in final weeks, despite looming Trump takeover
From LifeSiteNews
Outgoing President Joe Biden announced a new climate target of reducing American carbon emissions from 61-66% over the next decade, even though President Trump would be able to undo it as soon as next month.
Outgoing President Joe Biden announced December 19 a new climate target of reducing American carbon emissions of more than 60% over the next decade, even though returning President Donald Trump would be able to undo it as soon as next month.
“Today, as the United States continues to accelerate the transition to a clean energy economy, President Biden is announcing a new climate target for the United States: a 61-66 percent reduction in 2035 from 2005 levels in economy-wide net greenhouse gas emissions,” the White House announced, the Washington Free Beacon reports. The new target will be formally submitted to the United Nations Climate Change secretariat.
“President Biden’s new 2035 climate goal is both a reflection of what we’ve already accomplished,” Biden climate adviser John Podesta added, “and what we believe the United States can and should achieve in the future.”
The announcement may be little more than a symbolic gesture in the end, however, as Trump is widely expected to withdraw the United States from the Paris Climate Agreement upon resuming office in January, in the process voiding related climate obligations.
Trump formally pulled out of the Paris accords in August 2017, the first year of his first term, with then-U.S. Ambassador to the United Nations Nikki Haley stating that the administration would be “open to re-engaging in the Paris Agreement if the United States can identify terms that are more favorable to it, its business, its workers, its people, and its taxpayers.”
Such terms were never reached, however, leaving America out until Biden re-committed the nation to the Paris Agreement on the first day of his presidency, obligating U.S. policy to new economic regulations to cut carbon emissions.
In June, the Trump campaign confirmed Trump’s intentions to withdraw from Paris again. At the time, Trump’s team was reportedly mulling a number of non-finalized drafts of executive orders to do so.
Left-wing consternation on the matter is based on certitude in “anthropogenic global warming” (AGW) or “climate change,” the thesis that human activity, rather than natural phenomena, is primarily responsible for Earth’s changing climate and that such trends pose a danger to the planet in the form of rising sea levels and weather instability.
Activists have long claimed there is a “97 percent scientific consensus” in favor of AGW, but that number comes from a distortion of an overview of 11,944 papers from peer-reviewed journals, 66.4 percent of which expressed no opinion on the question; in fact, many of the authors identified with the AGW “consensus” later spoke out to say their positions had been misrepresented.
AGW proponents suffered a blow in 2010 with the discovery that their leading researchers at the Intergovernmental Panel on Climate Change, East Anglia Climate Research Unit, and National Oceanic and Atmospheric Administration had engaged in widespread data manipulation, flawed climate models, misrepresentation of sources, and suppression of dissenting findings in order to make the so-called “settled science” say what climate activists wanted it to.
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