Dear John,

Today, the Fraser Institute released new analysis, Prime Ministers and Government Spending, 2021.

With the federal budget scheduled for April 19th, we thought it important to update our work on per person spending at the federal level. Federal program spending will reach $17,091 per person in 2020/21, of which $6,089 is COVID-related. That means even without the hundreds of billions spent during COVID, federal spending per person would have been the highest in Canadian history. At $17,091 per person, federal spending in 2020/21 is nearly double the amount spent during the 2009 recession and more than double peak spending during the Second World War (adjusted for inflation).

Sadly, this is not an April Fools' Day joke!

I think the infographic speaks for itself.

Below is the news release. Please share with your colleagues and friends.

Best,

Niels

Niels Veldhuis | President
The Fraser Institute
1770 Burrard Street, 4th Floor, Vancouver, BC  V6J 3G7

Ottawa spent twice as much per Canadian in 2020 ($17,091) than height of WWII ($7,769)

VANCOUVER—The federal government is projected to spend $17,091 per Canadian in 2020/21, which is more than double what the government spent per person during the peak of the Second World War ($7,769) and nearly twice what was spent during the 2009 recession ($8,993), according to new research released today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

And even before the COVID-19 pandemic struck, Ottawa was already spending at record per person levels.

“While emergency spending to deal with the fallout from COVID-19 and the recession was necessary, this additional spending adds to already record-high spending levels that existed prior to the pandemic which is going to make it much harder for government finances to recover in any reasonable time period,” said Jake Fuss, a senior economist at the Fraser Institute and co-author of Prime Ministers and Government Spending, 2021 Edition.

Current projections indicate federal program spending in 2021/22 will reach $11,370 per person, an increase of roughly 20 per cent from $9,500 in 2019, the year before the pandemic and already the highest level of per person spending (inflation-adjusted) in Canadian history.

What’s more, this level of spending doesn’t include new stimulus spending or new programs such as national daycare or national pharmacare, both of which have been suggested as potential big-ticket items in the upcoming federal budget.

Crucially, this marked increase in per person spending began well before the COVID pandemic. Between the last budget of the Harper government in 2015 and fiscal year 2018/19, inflation-adjusted federal program spending (total spending minus interest costs) grew from $8,063 per person to $9,061 per person, which at that point was the highest level in Canadian history.

“The federal government was already spending at record levels—largely with borrowed money—before the COVID pandemic,” said Fuss.

“As we look to recover from the pandemic and recession, policymakers should address Ottawa’s pre-existing spending problem or else Canadians will likely face higher taxes in the future to cover the resulting debt accumulation and interest costs.”