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Taxpayer watchdog slams Trudeau gov’t for increasing debt ceiling: ‘Put down the credit card’

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From LifeSiteNews

By Anthony Murdoch

Canadian Finance Minister Chrystia Freeland authorized an additional $73 billion in borrowing this fiscal year.

After Canadian Finance Minister Chrystia Freeland gave herself and the government the authority to borrow an additional $73 billion this fiscal year, the head of the nation’s leading taxpayer watchdog group said the federal government needs to “put down the credit card” and return to common-sense spending.

Freeland, as per a February 15 cabinet order made under the Financial Administration Act, allowed the extra borrowing to take place.

The government has set “$517 billion to be the maximum aggregate principal amount of money that may be borrowed” before April 1. Before this cabinet order, however, the maximum amount was $444 billion.

Despite Freeland claiming that the increase in borrowing is “in no way a blank cheque,” Canadian Taxpayers Federation federal director Franco Terrazzano said the borrowing needs to end.

“The Trudeau government needs to put down the credit card and pick up some scissors,” Terrazzano told LifeSiteNews.

“The government should be cutting spending and balancing the budget, not racking up more debt for years to come.”

In 2021, Canada’s Parliament raised the federal debt borrowing amount by a whopping 56% under the Borrowing Authority Act. The amount went from $1.168 trillion to $1.831 trillion.

“What it does is set a ceiling for how much the government can spend,” Freeland said at the time.

Terrazzano told LifeSiteNews that the Trudeau government should be cutting spending and balancing the budget, not racking up more debt for years to come.

Terrazzano observed that in the coming year the Trudeau government will be spending “more money on debt interest charges than it sends to the provinces in health transfers.”

“In a handful of years, every penny collected from the GST (Goods and Service Tax) will go toward paying interest on the debt,” he noted.

Under Prime Minister Justin Trudeau, due to excessive COVID money printing, inflation has skyrocketed.

Last month, LifeSiteNews reported that fast-rising food costs in Canada have led to many people feeling a sense of “hopelessness and desperation” with nowhere to turn for help, according to the Canadian government’s own National Advisory Council on Poverty.

Last year, the Bank of Canada acknowledged that Trudeau’s federal “climate change” programs, which have been deemed “extreme” by some provincial leaders, are indeed helping to fuel inflation.

Terrazzano told LifeSiteNews that Trudeau should “completely scrap his carbon tax,” which is making everything more expensive.

Conservatives blast increased debt

Conservative Party of Canada (CPC) MPs have been critical of the raised debt ceiling. “You’re simply saying, ‘Give me a blank cheque and then trust me,’” MP Ed Fast said.

Freeland claimed that the “characterization of the borrowing authority limit as a blank cheque is simply false.”

CPC leader Pierre Poilievre recently asked, “Is there a dollar figure to which she would limit the debt?”

She replied that the government is “mindful that limits exist.”

During a February 13 Senate national finance committee meeting, Budget Officer Yves Giroux noted how Trudeau’s cabinet plans in terms of spending are not clear.

“We don’t know exactly what the government plans on spending or doing in terms of new spending or potential spending,” he said when asked by Senator Elizabeth Marshall if the new borrowing limits are “still realistic.”

Marshall added, “As it stands now, do you think it looks reasonable?”

“It looks sufficient, but the government always wants to give itself some room to maneuver in case there are unforeseen events that require borrowing on short notice,” Giroux replied.

A report from September 5, 2023, by Statistics Canada shows food prices are rising faster than headline inflation at a rate of between 10% and 18% per year.

According to a recent Statistics Canada survey of supermarket prices, Canadians are paying 12% more for carrots, 14% more for hamburger (ground meat), and 27% more for baby formula.

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Business

It Took Trump To Get Canada Serious About Free Trade With Itself

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From the  Frontier Centre for Public Policy

By Lee Harding

Trump’s protectionism has jolted Canada into finally beginning to tear down interprovincial trade barriers

The threat of Donald Trump’s tariffs and the potential collapse of North American free trade have prompted Canada to look inward. With international trade under pressure, the country is—at last—taking meaningful steps to improve trade within its borders.

Canada’s Constitution gives provinces control over many key economic levers. While Ottawa manages international trade, the provinces regulate licensing, certification and procurement rules. These fragmented regulations have long acted as internal trade barriers, forcing companies and professionals to navigate duplicate approval processes when operating across provincial lines.

These restrictions increase costs, delay projects and limit job opportunities for businesses and workers. For consumers, they mean higher prices and fewer choices. Economists estimate that these barriers hold back up to $200 billion of Canada’s economy annually, roughly eight per cent of the country’s GDP.

Ironically, it wasn’t until after Canada signed the North American Free Trade Agreement that it began to address domestic trade restrictions. In 1994, the first ministers signed the Agreement on Internal Trade (AIT), committing to equal treatment of bidders on provincial and municipal contracts. Subsequent regional agreements, such as Alberta and British Columbia’s Trade, Investment and Labour Mobility Agreement in 2007, and the New West Partnership that followed, expanded cooperation to include broader credential recognition and enforceable dispute resolution.

In 2017, the Canadian Free Trade Agreement (CFTA) replaced the AIT to streamline trade among provinces and territories. While more ambitious in scope, the CFTA’s effectiveness has been limited by a patchwork of exemptions and slow implementation.

Now, however, Trump’s protectionism has reignited momentum to fix the problem. In recent months, provincial and territorial labour market ministers met with their federal counterpart to strengthen the CFTA. Their goal: to remove longstanding barriers and unlock the full potential of Canada’s internal market.

According to a March 5 CFTA press release, five governments have agreed to eliminate 40 exemptions they previously claimed for themselves. A June 1 deadline has been set to produce an action plan for nationwide mutual recognition of professional credentials. Ministers are also working on the mutual recognition of consumer goods, excluding food, so that if a product is approved for sale in one province, it can be sold anywhere in Canada without added red tape.

Ontario Premier Doug Ford has signalled that his province won’t wait for consensus. Ontario is dropping all its CFTA exemptions, allowing medical professionals to begin practising while awaiting registration with provincial regulators.

Ontario has partnered with Nova Scotia and New Brunswick to implement mutual recognition of goods, services and registered workers. These provinces have also enabled direct-to-consumer alcohol sales, letting individuals purchase alcohol directly from producers for personal consumption.

A joint CFTA statement says other provinces intend to follow suit, except Prince Edward Island and Newfoundland and Labrador.

These developments are long overdue. Confederation happened more than 150 years ago, and prohibition ended more than a century ago, yet Canadians still face barriers when trying to buy a bottle of wine from another province or find work across a provincial line.

Perhaps now, Canada will finally become the economic union it was always meant to be. Few would thank Donald Trump, but without his tariffs, this renewed urgency to break down internal trade barriers might never have emerged.

Lee Harding is a research fellow with the Frontier Centre for Public Policy.

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Alberta

Low oil prices could have big consequences for Alberta’s finances

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From the Fraser Institute

By Tegan Hill

Amid the tariff war, the price of West Texas Intermediate oil—a common benchmark—recently dropped below US$60 per barrel. Given every $1 drop in oil prices is an estimated $750 million hit to provincial revenues, if oil prices remain low for long, there could be big implications for Alberta’s budget.

The Smith government already projects a $5.2 billion budget deficit in 2025/26 with continued deficits over the following two years. This year’s deficit is based on oil prices averaging US$68.00 per barrel. While the budget does include a $4 billion “contingency” for unforeseen events, given the economic and fiscal impact of Trump’s tariffs, it could quickly be eaten up.

Budget deficits come with costs for Albertans, who will already pay a projected $600 each in provincial government debt interest in 2025/26. That’s money that could have gone towards health care and education, or even tax relief.

Unfortunately, this is all part of the resource revenue rollercoaster that’s are all too familiar to Albertans.

Resource revenue (including oil and gas royalties) is inherently volatile. In the last 10 years alone, it has been as high as $25.2 billion in 2022/23 and as low as $2.8 billion in 2015/16. The provincial government typically enjoys budget surpluses—and increases government spending—when oil prices and resource revenue is relatively high, but is thrown into deficits when resource revenues inevitably fall.

Fortunately, the Smith government can mitigate this volatility.

The key is limiting the level of resource revenue included in the budget to a set stable amount. Any resource revenue above that stable amount is automatically saved in a rainy-day fund to be withdrawn to maintain that stable amount in the budget during years of relatively low resource revenue. The logic is simple: save during the good times so you can weather the storm during bad times.

Indeed, if the Smith government had created a rainy-day account in 2023, for example, it could have already built up a sizeable fund to help stabilize the budget when resource revenue declines. While the Smith government has deposited some money in the Heritage Fund in recent years, it has not created a dedicated rainy-day account or introduced a similar mechanism to help stabilize provincial finances.

Limiting the amount of resource revenue in the budget, particularly during times of relatively high resource revenue, also tempers demand for higher spending, which is only fiscally sustainable with permanently high resource revenues. In other words, if the government creates a rainy-day account, spending would become more closely align with stable ongoing levels of revenue.

And it’s not too late. To end the boom-bust cycle and finally help stabilize provincial finances, the Smith government should create a rainy-day account.

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