Dear John,

Time and time again, Prime Minister Justin Trudeau and Finance Minister Chrystia Freeland have emphasized the importance of being fiscally responsible with federal finances.

Unfortunately, the latest federal budget tabled yesterday ensures once again their rhetoric rings hollow.

This mismanagement is rooted in the government’s insatiable appetite for new and expanded programs or services, which has endured for nine years and will continue for the foreseeable future.

The budget introduces billions of dollars in additional spending, raising overall program spending $77.2 billion higher over the next four years than was forecasted last spring.

On a per-person inflation-adjusted level, spending this year will be 28% per cent higher than during the final full year of Stephen Harper’s tenure as prime minister!

The Trudeau government has already recorded the five highest levels of federal program spending per person in Canadian history, and budget projections suggest it’s now on track to possess the eight highest levels of per-person spending by the end of its term next autumn.

And the budget contains no plan for a return to balanced budgets any time soon.

As a result, federal debt is expected to climb $156.2 billion from now until April 2029.

The budget also brings in new taxes, including an increase to the capital gains inclusion tax rate from 50% to 66.6% for capital gains realized above $250,000.

This will act as a huge disincentive for investment in Canada at a time when the country already struggles to attract the very investment we need. Businesses and individuals will now simply invest their capital elsewhere.

It didn’t have to be this way.

As we here at the Fraser Institute pointed out before the budget, had the government simply limited the growth in annual program spending to 0.3% for two years, it could have balanced the budget by 2026/27 and avoided significant debt accumulation.

Instead, the government chose to increase annual program spending by an average of 4.4% over the next two years and kick the debt problem down the road for another government to solve.

It is clear that the Trudeau government has no interest in being fiscally responsible or improving living standards for Canadians. Instead of showing restraint, the government chose to repeat its mistakes and lead federal finances down an increasingly perilous path.

John, if you value this type of research and support our mission to inform Canadians of these facts, please consider making a donation today.

We do not accept government funding – we rely entirely on supporters like you!

Thank you for your support.

Sincerely,

Niels Veldhuis
President
The Fraser Institute