An economic update: government unveils new spending

This week in Ottawa, the Minister of Finance presented an update on the economy and the Liberal government's finances for the next five...

This week in Ottawa, the Minister of Finance presented an update on the economy and the Liberal government’s finances for the next five years. The government downgraded forecasts for GDP growth (from 1.4-1.2 per cent in 2016 and 2.2-2 per cent in 2017) and unveiled new spending and policy initiatives related to infrastructure, immigration programs and foreign investment attraction.

Since before the election, the Conservative Party has insisted that in the current fragile global economy now is not the time to plunge Canada into deficit and debt. The risks are too high.

The initial Liberal economic plan has failed and Canadians are already paying for it. This past week, the Parliamentary Budget Officer reported that since the Prime Minister was elected, the economy hasn’t created a single additional full time job.

The Economic Statement unveiled the Liberals’ Plan ‘B’ which is to borrow an extra $32 billion with no reason to believe we will get better results. There is no plan to eventually balance the budget even though the Liberals promised to do that, “by the next election”. Economists and financial watchdogs, including from TD Bank and BMO, have publicly called on the government to halt any additional spending.

Soon, the Liberals will impose a job killing CPP tax hike on all workers and employers even though internal documents from Finance Canada show that the Finance Minister was warned that higher CPP premiums will reduce job growth until 2035. The Liberals are also launching a national carbon tax on everything that will cost families thousands of dollars every year. Our local agriculture sector and anyone who heats their home or drives a car or truck will be hit hard in the pocketbook.

New rules on mortgages are already making it significantly harder – or impossible – for Canadians to buy a home (especially young folks just starting out and hoping to raise a family). Families are experiencing the loss of the family tax credits for sports and arts classes and more. Firms are missing the small business tax cuts the Liberals cancelled.

As the Chair of the Standing Committee on Public Accounts, I was pleased to see that the 2016 Public Accounts of Canada, the annual three-volume document that reports the expenditure totals for the Government of Canada, reported that the previous Conservative government did in fact achieve a budgetary surplus of $1.9 billion in 2014-15.

As the former Minister of State (Finance) my job was to help the late Hon. Jim Flaherty and his successor the Hon. Joe Oliver reach that balanced budget goal. The Public Accounts reveal that in 2015-16 there was a $1 billion deficit. Canada was on course for surpluses in the following years. Further, the Public Accounts states that just under ten cents of every dollar of government revenue is being spent on interest payments to service the accumulated national debt in the current ‘low-interest’ economy. The Economic Statement by the Liberals points to annual budgetary deficits for the next five years at least.

If you have any questions or concerns regarding this or previous columns you may write me at 4945-50th Street, Camrose, Alberta, T4V 1P9, call 780-608-4600, toll-free 1-800-665-4358, fax 780-608-4603 or e-mail Kevin.Sorenson.c1@parl.gc.ca.