Debt eroding economy

Canada’s economy is facing a brisk head wind.

Recently, Statistics Canada released the GDP, income and expenditure report for Canada’s second quarter, revealing some troubling indicators.

Real GDP growth decreased .4 per cent and while that may not seem like a significant drop, it is the largest quarterly decline since 2009.

Another area of concern is business investment that has continued to decline for the last several quarters. 

Construction has declined while the public sector has increased in size. 

Fortunately, there are some promising indicators with some growth in manufacturing along with an increase in mining along with oil and gas extraction.

For many of these reasons, the Bank of Canada announced the key interest rate will remain at .5 per cent with a forecast for increased GDP growth in the next fiscal quarter. 

I mention some of Canada’s fiscal indicators because it is critically important that fiscal policy is not overlooked when Parliament resumes Sept. 19.

We should not overlook that much of the government’s debt forecasts that already show a significant increase in debt are also depending on positive economic growth to help offset significant increases in spending. 

In the 2013/14 fiscal year, over $28 billion was spent just on debt servicing. 

To put that number into context: the total amount of health transfers from the federal government to the provinces and territories in the same fiscal year was $32 billion.

If the Liberal government continues to dramatically increase debt as is currently forecast and economic growth does not increase as is anticipated, a serious fiscal crunch will emerge.

It will impact federal government finances at a time when the population is significantly aging with health care costs expected to increase dramatically.

The intent of this week’s report is not to cast doom and gloom as overall, Canada is relatively strong compared to other G-7 nations.

However, the current direction away from balanced budgets and into increased spending while ignoring policies and projects that create investment, employment and increased economic growth is a concern.

In June, I tabled a motion to immediately elevate the Comeau decision to the Supreme Court for constitutional clarification that could potentially significantly increase internal trade between Canadian provinces.

Despite having the support of the Conservative, NDP and Green Party MPs, something that rarely occurs, even this modest economic motion was opposed by the government.

I have received a great deal of positive comments from constituents on reducing interprovincial trade barriers as well as other suggestions to help grow our economy over my summer listening tour.

In this regard, my summer listening tour has been successful as I believe that the best ideas come from those closest to challenges or opportunities and why it’s critical for elected officials to hear those ideas and suggestions first hand.

It is important to me to propose and not just oppose while in Opposition and I will continue to bring motions forward that can increase internal trade and help local producers to have unrestricted access to all Canadian Provinces.

I welcome your comments, questions and concerns on this or any matter related to the federal government.

I can be reached by email or by phone toll free at 1-800-665-8711.


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About the Author

Dan Albas, Conservative member of Parliament for the riding of Central Okanagan-Similkameen-Nicola, is the shadow minister of innovation, science, economic development and internal trade, and sits on the standing committee on finance.

Before entering public life, Dan was the owner of Kick City Martial Arts, responsible for training hundreds of men, women and youth to bring out their best.

In British Columbia, Dan has been consistently one of the lowest spending MPs on office and administration related costs despite operating two offices to better serve local constituents.

Dan is consistently recognized as one of Canada’s top 10 most active members of Parliament on Twitter (@danalbas) and continues to write a weekly column published in many local newspapers and on this website.

He can be reached at [email protected] or call toll free at 1-800-665-8711.

The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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