Dear John,

Yesterday, the federal government tabled its latest budget.

In recent weeks, Finance Minister Chrystia Freeland repeatedly stated it was time to “exercise fiscal restraint” as the government could not afford to “pour fuel on the flames of inflation.”

Unfortunately, the minister’s rhetoric did not match the details of yesterday's budget.

Instead, the budget includes several new measures or expanded programs.

On a per-person inflation-adjusted basis, federal program spending is forecasted to reach $11,476. That's 7.4% above the levels observed in 2019/20 — the final year before COVID and one of the highest spending years in Canadian history.

This should not come as a surprise – the Trudeau government has a habit of increasing spending at every turn.

Restraint and fiscal responsibility have largely fallen to the wayside as new or expanded programs are rolled out in nearly every budget or fiscal update.

Just five months ago, the government had committed to balance the books by March 2028. But there is now no target date for a return to black ink.

Instead, federal debt is now expected to climb by $131.8 billion by 2028. What’s more, the government expects to violate its own fiscal rule of declining its debt relative to the size of the economy. 

These deficits are not necessary: emergency COVID programs have wound down or expired, and revenues are much higher than what was anticipated a year ago.

If the government had simply returned spending to 2019 per-capita levels, Ottawa would be in a surplus position next year!

John, more government spending and debt are not the keys to success for Canada’s fiscal future.

I'm sure you'll agree: at a time like this, the expert, peer-reviewed analyses that the Fraser Institute provides are needed more than ever.

We maintain our independence by not accepting government grants or handouts to conduct our research. We rely entirely on supporters like you.

Can you help us continue our work with a donation today? Every dollar donated helps us bring our research to more Canadians!

Thank you for your continued support.

Sincerely,

Niels Veldhuis
President
The Fraser Institute