The federal Liberal government tabled a budget Tuesday that calls for billions of dollars in new spending — something they’ve done in every other fiscal document for the last seven years.
A review of federal finances shows just how big the government has become in recent years as a result. Ottawa is projected to spend about $151 billion more next year than it did in 2014-15, the year before Prime Minister Justin Trudeau and his party won government in November.
It’s not just expenses — federal public service employment has increased by 31 per cent in seven years. The government has added nearly 80,000 employees to the roster during its tenure.
Total expenses for the federal government were $280.4 billion in the 2014-15 fiscal year.
Adjusted for inflation, that’s roughly $345.5 billion in today’s dollars.
Finance Minister Chrystia Freeland’s budget projects total expenses will be $496.9 billion in 2023-24 — a year when there’s no extraordinary pandemic-related spending.
And under Freeland’s current plan, the spending will move higher in the years to come. Her budget projects spending will ring in at $555.7 billion in 2027-28.
Total program expenses as a share of the economy — a figure that includes all government spending other than public debt charges — is at its highest point in three decades.
In 2014-15, program spending was 12.8 per cent of gross domestic product (GDP). It’s over 16 per cent now.
“This Liberal government has put their stamp on the state and the economy — they’ve taken us in a new direction. Even before the pandemic, they had pretty big budgets,” Sahir Khan, a former deputy parliamentary budget officer and the executive vice-president of the uOttawa Institute of Fiscal Studies and Democracy, told CBC News.
“The state has gotten bigger, there’s no question. They abandoned the Chrétien-Martin-Harper political consensus as soon as they got into power,” said Khan, pointing to previous governments that kept spending in the 12-13 per cent range of GDP.
The eye-popping spending increases may seem like a problem but Khan said it’s sustainable as long as the economy continues to grow.
“It will work, it’s functional and it’s fiscally sustainable. We’re a $3-trillion dollar economy,” he said.
A lot of this spending is possible because of cuts made in the 1990s when Canada was in worse financial shape.
“Chrétien-Martin did the heavy lifting. That’s what’s given us the room now,” Khan said.
Trudeau himself mounted a similar defence this week when asked if he can really describe his budget as “fiscally responsible” given the plan to spend more now and into the future.
“We have the lowest deficit in the G7, the best debt-to-GDP ratio and we’ve preserved our AAA credit rating. We’re one of the three largest economies in the world with a AAA credit rating, which means that our plan is responsible,” he said.
Federal debt climbs to $1.2 trillion
The current Liberal government has never posted a budget surplus.
Under both former finance minister Bill Morneau and Freeland, Ottawa has always been in the red.
That’s added to the federal debt, which, at last check, is roughly $1.2 trillion — double the $612.3 billion it was when Trudeau and his team took the reins of power.
The government is no longer projecting when it will return to a balanced budget.
While the fall economic statement tabled last November suggested Ottawa’s budget might be back in the black in 2027-28, Freeland dumped that projection in Tuesday’s budget after announcing some new spending on health and dental care and a series of tax credits to spur green tech and energy development.
Deputy Prime Minister Chrystia Freeland and B.C Premier David Eby tour a clean electricity research and development facility in Surrey, B.C., on Thursday. (Ben Nelms/CBC)
Franco Terrazzano is the federal director of the Canadian Taxpayers Federation, a group that advocates for lower spending and a smaller government.
He said he doesn’t think the Liberal government will ever balance the budget.
“Fiscal management, it’s like a muscle, if you don’t flex it and if you don’t use it, you lose it. They just don’t have the skill set anymore. The government wants to spend more on everything forever and that’s not a good way to manage the public purse,” Terrazzano said.
“The government is spending so much that they could win the lottery every single day of the year and they’d still never pay down the deficit. They’d just spend more.”
The COVID-19 pandemic was a massive shock to the country and its finances.
In an effort to keep the economy afloat, Ottawa rolled out a stimulus program to backstop business and send cheques to the unemployed, among other initiatives.
But it wasn’t just the $327-billion deficit in 2020-21 that added to the national debt. It’s grown every year this government has been in power — in good economic times and bad.
The party that promised “real change” in the 2015 election has delivered on its commitment to fundamentally shift the role of government in Canadian life.
“I don’t think this big spending has been hidden. This is what was advertised. They promised a centre-left shift after the Harper years,” Khan said.
Under Trudeau, for example, the government has rolled out a more generous Canada Child Benefit, created a national child care program, increased Guaranteed Income Supplement (GIS) payments for impoverished seniors, hiked Old Age Security payouts for some of the elderly and spent tens of billions of dollars on Indigenous programming.
It has invested more in infrastructure, housing, health care and, with Tuesday’s budget, it’s poised to stand up a dental care program that will see the federal treasury cover the cost of dentistry for millions of Canadians.
The government also has resettled tens of thousands of refugees and introduced a new Canada Workers’ Benefit for low-wage people, among many other measures.
While some of this spending has been offset by tax increases (the government increased income tax rates for higher income earners, for example) and higher revenues from a growing economy, a lot of it has been paid for by taking on more debt.
The cost to service all that debt has increased. Interest charges on the debt will cost taxpayers almost $44 billion in 2023. Interest charges are expected to reach $50 billion in 2027.
While relatively high in numerical terms, public debt charges as a percentage of GDP are still lower than they were in the 1990s.
The government projects debt charges will be about 2 per cent of GDP compared to nearly six per cent in 1991.
That’s cold comfort to Terrazzano.
“Every year, there’s more money wasted on interest charges. That’s money that can’t be used to improve health care or lower taxes. It’s just a bunch of money going to bond fund managers,” he said.
Public service employment has grown by 31 per cent
Now that the government does a lot more than it did before Trudeau took over, the size of the bureaucracy has increased in lockstep.
Federal statistics on the size of the public service show that the number of people on the government’s payroll has climbed considerably in seven years.
In 2015, there were 257,034 federal workers — a figure that includes people working in what the government calls “core public administration” and “separate agencies.”
Separate agencies include the Canada Revenue Service, Parks Canada, the Canadian Nuclear Safety Commission, the Canadian Food Inspection Agency and more than a dozen others.
These numbers, however, do not include the Canadian Armed Forces (CAF), the RCMP, political staff and some people working overseas.
Also excluded are workers at federal Crown corporations like Canada Post, CBC/Radio-Canada and Via Rail, which generate revenue to cover some of their costs.
In 2022, there were 335,957 federal public servants — an increase of 30.7 per cent compared to seven years before.
Canada’s population, meanwhile, grew by about 8.5 per cent in the same time period.
That means the federal public service’s employment growth rate is three times greater than the population growth rate.
Quebec legislature member Youri Chassin has announced he’s leaving the Coalition Avenir Québec government to sit as an Independent.
He announced the decision shortly after writing an open letter criticizing Premier François Legault’s government for abandoning its principles of smaller government.
In the letter published in Le Journal de Montréal and Le Journal de Québec, Chassin accused the party of falling back on what he called the old formula of throwing money at problems instead of looking to do things differently.
Chassin says public services are more fragile than ever, despite rising spending that pushed the province to a record $11-billion deficit projected in the last budget.
He is the second CAQ member to leave the party in a little more than one week, after economy and energy minister Pierre Fitzgibbon announced Sept. 4 he would leave because he lost motivation to do his job.
Chassin says he has no intention of joining another party and will instead sit as an Independent until the end of his term.
He has represented the Saint-Jérôme riding since the CAQ rose to power in 2018, but has not served in cabinet.
This report by The Canadian Press was first published Sept. 12, 2024.
MONTREAL – NDP Leader Jagmeet Singh says he will not be taking advice from Pierre Poilievre after the Conservative leader challenged him to bring down government.
“I say directly to Pierre Poilievre: I’m not going to listen to you,” said Singh on Wednesday, accusing Poilievre of wanting to take away dental-care coverage from Canadians, among other things.
“I’m not going to listen to your advice. You want to destroy people’s lives, I want to build up a brighter future.”
Earlier in the day, Poilievre challenged Singh to commit to voting non-confidence in the government, saying his party will force a vote in the House of Commons “at the earliest possibly opportunity.”
“I’m asking Jagmeet Singh and the NDP to commit unequivocally before Monday’s byelections: will they vote non-confidence to bring down the costly coalition and trigger a carbon tax election, or will Jagmeet Singh sell out Canadians again?” Poilievre said.
“It’s put up or shut up time for the NDP.”
While Singh rejected the idea he would ever listen to Poilievre, he did not say how the NDP would vote on a non-confidence motion.
“I’ve said on any vote, we’re going to look at the vote and we’ll make our decision. I’m not going to say our decision ahead of time,” he said.
Singh’s top adviser said on Tuesday the NDP leader is not particularly eager to trigger an election, even as the Conservatives challenge him to do just that.
Anne McGrath, Singh’s principal secretary, says there will be more volatility in Parliament and the odds of an early election have risen.
“I don’t think he is anxious to launch one, or chomping at the bit to have one, but it can happen,” she said in an interview.
New Democrat MPs are in a second day of meetings in Montreal as they nail down a plan for how to navigate the minority Parliament this fall.
The caucus retreat comes one week after Singh announced the party has left the supply-and-confidence agreement with the governing Liberals.
It’s also taking place in the very city where New Democrats are hoping to pick up a seat on Monday, when voters go to the polls in Montreal’s LaSalle—Émard—Verdun. A second byelection is being held that day in the Winnipeg riding of Elmwood—Transcona, where the NDP is hoping to hold onto a seat the Conservatives are also vying for.
While New Democrats are seeking to distance themselves from the Liberals, they don’t appear ready to trigger a general election.
Singh signalled on Tuesday that he will have more to say Wednesday about the party’s strategy for the upcoming sitting.
He is hoping to convince Canadians that his party can defeat the federal Conservatives, who have been riding high in the polls over the last year.
Singh has attacked Poilievre as someone who would bring back Harper-style cuts to programs that Canadians rely on, including the national dental-care program that was part of the supply-and-confidence agreement.
The Canadian Press has asked Poilievre’s office whether the Conservative leader intends to keep the program in place, if he forms government after the next election.
With the return of Parliament just days away, the NDP is also keeping in mind how other parties will look to capitalize on the new makeup of the House of Commons.
The Bloc Québécois has already indicated that it’s written up a list of demands for the Liberals in exchange for support on votes.
The next federal election must take place by October 2025 at the latest.
This report by The Canadian Press was first published Sept. 11, 2024.
Montreal Mayor Valérie Plante is defending her decision to turn off comments on her social media accounts — with an announcement on social media.
She posted screenshots to X this morning of vulgar names she’s been called on the platform, and says comments on her posts for months have been dominated by insults, to the point that she decided to block them.
Montreal’s Opposition leader and the Canadian Civil Liberties Association have criticized Plante for limiting freedom of expression by restricting comments on her X and Instagram accounts.
They say elected officials who use social media should be willing to hear from constituents on those platforms.
However, Plante says some people may believe there is a fundamental right to call someone offensive names and to normalize violence online, but she disagrees.
Her statement on X is closed to comments.
This report by The Canadian Press was first published Sept. 11, 2024.
