Policies have not translated into prosperity... quel suprise
Poor policies responsible for stagnant economy and deteriorating federal finances
The Trudeau government was elected in 2015 based in part on a new approach to government policy, promising greater prosperity for Canadians through short-term deficit spending, lower taxes for most Canadians, and a more direct and active role for government in economic development.
However, the result has been economic stagnation and a marked deterioration in the country’s finances. If Canada is to restore its economic and fiscal health, Ottawa must enact fundamental policy reform.
The Trudeau government has significantly increased spending from
$256.2 billion in 2014-15 to a projected
$449.8 billion in 2023-24 (excluding debt interest costs) to expand existing programs and create new programs.
In 2016, the government increased the top personal income tax rate on entrepreneurs, professionals and businessowners from 29 per cent to 33 per cent. Consequently, the combined top personal income tax rate (federal and provincial) now exceeds 50 per cent in eight provinces and the country’s average top combined rate in 2022 ranked fifth-highest among 38 OECD countries. This represents a serious competitive challenge for Canada to attract and retain entrepreneurs, investors and skilled professionals (e.g. doctors) we badly need.
And while the Trudeau government reduced the middle personal income tax rate, it also eliminated several tax credits. Due to the combination of these two policy changes,
86 per cent of middle-income families now pay higher personal income taxes.
The Trudeau government also borrowed to help finance new spending, triggering a string of budget deficits. As a result, federal gross debt has ballooned to $1.9 trillion (2022-23) and will reach a projected $2.4 trillion by 2027-28, fuelling a marked growth in interest costs, which now consume substantial levels of revenue unavailable for government services or tax reduction.
Simply put, the Trudeau government has produced large increases in government spending, taxes and borrowing, which have not translated into a more robust and vibrant economy.
Federal gross debt will reach a projected $2.4 trillion by 2027-28.
www.fraserinstitute.org