Latest federal budget pushes up government spending

Spending through the roof

Since my report last week, the Trudeau Liberal government introduced its 2022 federal budget.

As is often the case with government budgets, various media organizations, political pundits and political parties characterize them in various ways and this time it was no different.

From the perspective of the finance minister, she labelled the budget a “return to fiscal responsibility,” largely on account of her budget proposing to spend less money than the previous pandemic-related budgets. In other words, this was intended to be more of a “back to normal” budget.

That raised an important question—what is “normal” in terms of the federal budget going forward, post-COVID?

For some context, in 2015, the final year of the Harper (Conservative) government, total federal spending was just over $248 billion. In the 2019-2020 fiscal year, with the Trudeau Liberal majority government, spending was just over $338 billion. That was a significant increase of $90 billion.

Leaving out the COVID pandemic period, where total federal spending in the 2020-2021 fiscal period hit a record high of $608 billion, we are now facing this new “back to fiscal reality” budget that proposes a total of $434.3 billion in spending. To recap, pre-COVID spending was $338 billion and the Liberals “new normal” is now $434 billion—an increase of $96 billion over pre-COVID spending.

What this means is that some of the “temporary” spending measures have now become permanent.

It is also worth pointing out that in the Liberals’ 2019 budget, they included forecasts of future spending in the amount of $358 billion for this current fiscal year. That amount, as it turns out, was short by $76 billion from the current budget.

While the 2022 budget includes yet another deficit, this time the amount is close to $53 billion and the Liberals argue that is affordable. The affordability argument is based on the principal that as Canada’s economy grows, the added GDP growth will increase government revenues at a faster pace than the increases in government program spending, and by extension, lower the debt-to-GDP ratio.

While this is true and applies to all governments when it comes to budgeting, it also depends upon some constants, such as the rate of growth and spending sustained at proportionate levels.

In the case of the current Liberal government, as is well-documented, even when excluding COVID related spending, the prime minister will always increase spending well beyond what was forecast and further increase our deficit in the process.

Even in this current, “back to fiscal reality” budget, many of the Liberals’ campaign promises are missing from it. Likewise, the recent backroom deal with the NDP that calls for, among other programs, national pharmacare, which is completely un-funded. According to the Parliamentary Budget Officer, a national pharmacare program could cost close to $20 billion a year.

So as these various Liberal/NDP promises are eventually announced, it will increase our deficit spending.
Let’s hope Canada's economic growth does not also decline.

My question this week:

Are you satisfied with the “new normal” of Liberal budgetary spending?

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

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

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About the Author

Dan Albas, Conservative member of Parliament for the riding of Central Okanagan-Similkameen-Nicola, is the official Oppositions's finance critic.

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.

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

Dan welcomes comments, questions and concerns from citizens and is often available to speak to groups and organizations on matters of federal concern. 

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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