Higher government spending will lead to higher taxes and lower rates of economic growth.
canadian federal budget
Ottawa will likely have more revenue—perhaps considerably more—than forecast when the government tables the budget.
Nearly 60 per cent of the Liberal infrastructure spending was on “green” and “social” projects.
At 79 per cent, Canada had the fastest growth in its debt-to-GDP ratio in the G-7.
Whereas the Chrétien government used balanced budgets as a guiding fiscal anchor, the Trudeau government has not had an effective fiscal rule imposing discipline on its spending, taxing, and borrowing decisions, resulting in the federal government being less prepared to respond to the current recession.
Between 2013 and 2017, foreign investment in Canada declined by 55.1 per cent.
Finance Minister Bill Morneau’s budget missed an opportunity to convince investors that Canada remains a desirable place to invest.
The reasonable approach to balancing the budget is to find savings and reduce spending—not raise taxes.
Since the Liberals’ first forecast in 2015, expected GDP for 2017 has dropped by $62 billion or $1,700 per Canadian.