EDITORIAL: Pressure is on for Morneau to display fiscal restraint
Finance Minister Bill Morneau tables the Liberal government’s third federal budget on Tuesday.
Expect little relief from growing taxes, debt and deficits.
There was a time when polls consistently showed ‘the economy’ as the top issue of concern — because people worry about their jobs.
However, a recent year-end Angus Reid poll showed ‘Government spending / deficits’ has risen to tie economic concerns as the chief worry among Canadians.
That’s a reflection of what average Canadians implicitly understand, that you can’t run a country on a credit card.
While Prime Minister Justin Trudeau campaigned on running ‘modest’ deficits of no more than $10 billion per year, the Liberals quickly blew past that number. They’ve since topped $10 billion more than once and the current deficit is around $20 billion.
No wonder voters are concerned. All the deficits racked up so far translate into increased future debt and higher interest payments that rob government’s ability to actually help Canadians. It’s money that could otherwise go to public services or tax relief.
It’s hardly an understatement to say this undermines Canada’s future prosperity. These were arguments made by both former PM Stephen Harper and former NDP leader Tom Mulcair when Trudeau first proposed his ‘modest’ deficits.
These aren’t just partisan jabs either. An internal finance department report from late 2016 said the deficit trajectory Trudeau and Morneau had set out on “would be sufficient to put at risk the fiscal sustainability of the federal government.”
This is why the pressure is on for Morneau to deliver fiscal restraint. He needs to reassure both Bay Street and Main Street that he can steer us clear of this trajectory.
“The government has grown considerably in its first two years in office,” writes Sean Speer, a Macdonald-Laurier Institute senior fellow, in a Sun guest column. “Program spending has increased, on average, by 6.4% annually. This far outstrips typical benchmarks such as economy growth or inflation.”
Tuesday’s budget will need to show much more responsible budget figures. If this happens, taxpayers and business circles will nod approvingly. If they don’t, if they instead recklessly offer up more of the same, confidence in the Liberals ability to effectively manage the coffers will further erode.