Many readers reacted to that column by arguing the new NDP-Liberal alliance will grow, not balance, budgets. They’re obviously right. Don’t expect a balanced budget within the next few years, even though it would be possible — even with new defence commitments. But the larger point is that we are at an inflection point, which Canadians need to consider seriously.
Before the pandemic, federal spending had reached $335 billion, about $9,200 for each Canadian. With pandemic spending, federal spending almost doubled to $613 billion or $16,100 per capita. Common sense says that with the emergency over this sharp increase in per capita federal costs should fall back closer to pre-pandemic spending. Instead, “Build Back Bigger” says spending will reach new heights.
A national government is critical for defence, law and order, foreign policy, banking and its other constitutional responsibilities. It obviously needs tax dollars to fund these responsibilities. With its large bureaucracy, the federal government also transfers huge swaths of money from one Canadian to another through employment insurance, equalization, subsidies, child and elderly benefits, refundable tax credits and so on. Most Canadians, including myself, support a social safety net.
The federal government does not have constitutional power over health, education and much infrastructure so it uses its spending power to distort provincial priorities. The arguments in favour of federal spending power are twofold: the federal government has greater capacity to raise taxes than the provinces and its policies result in better coordination among provinces. These theoretical arguments have little to do with reality, however. Most provinces have become quite adept at raising taxes.
The delineation of powers between provincial & federal govts should be adhered to more deliberately for budgetary & program delivery reasons. Too much overlap right now which means misuse of taxpayers dollars and outright offuscation.
Yup. Let the rich get richer and to hell with anyone else. That is the Conservative mentality.
I'm expecting an increase to HST. How else can Jagteeth pay for his chiclets?
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