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Fix the budget before it’s too late

Last week, U.K. Prime Minister Rishi Sunak called an election for this summer. In November, our American friends will have an election, and, at some point in the next 16 months, Canadians too will go to the polls.

The issues facing these three nations are very similar: broken immigration systems, insufficient access to healthcare, entitlement programs with dwindling funds, aging populations coupled with low birth rates, crime, stagnant economies, and an inflated cost of living.

But one issue that is foundational and key to solving all the others is public debt. That’s why Conservatives keep saying, we need to fix the budget.

To understand how a country is doing financially we need to look at two numbers, what is a country’s Gross Domestic Product (GDP) and how much of that amount is going to cover public debts.

GDP is the monetary measure of the market value of the goods and services produced in/by a country, and by extension a good measure of its economic health.

Debt-to-GDP ratio is the metric comparing a country’s public debt to its gross domestic product. By comparing what a country owes with what it produces, the debt-to-GDP ratio reliably indicates that particular country’s ability to pay back its debts.

Put more simply, like a family budget, a government needs to look at two things. What are our revenues (money coming in) and what are our debts (money going out)? Can the revenues cover our debts and still leave us enough to live and meet other expenses?

Canada currently sits at around a 68% debt-to-GDP ratio. In other words, 68 cents out of every dollar generated by Canada’s economy (theoretically) goes to paying for Canada’s debt.

GDP per-capita—a metric by which the total GDP is divided by theoretical share per person—which I have discussed in this column before, paints a much bleaker picture, with experts stating Canada is currently on the road to decades of economic stagnancy.  

Canada’s national debt currently sits at approximately $1.2 trillion. It is worth noting that half of that debt was racked up by Justin Trudeau in just 9 years.

As anyone who has ever been in debt knows, debt snowballs quickly. Likewise for nations, it’s amazing just how quickly bad leadership and poor fiscal policies can cripple a nation financially.

For example, the U.S. national debt spiked during the Obama years, following the 2008/9 recession. The rise began to flatten early in the Trump years; however, it spiked again when both the Trump and Biden administrations embraced lockdowns and the costs associated therewith. In fact, like Trudeau who personally doubled our national debt in just eight years, the combined eight years of Presidents Trump and Biden nearly doubled the US national debt, adding a combined $14 trillion.

Likewise in Canada, until the 1970’s Canada’s national debt was relatively low. It was under Trudeau senior that debt and deficits first began to snowball. In 1972, the Trudeau (senior) Liberals wound up in a minority government situation and decided on a strategy to spend their way to a majority—sound familiar?

Between the Mulroney, Chretien, Martin, and Harper years, those governments were able to slowly reign in deficit spending and, as a result, Canada’s debt.

Our previous Conservative Government finally succeeded in getting our debt and deficits under control. We left the incoming Trudeau Government a balanced budget—this despite weathering the worst financial crisis since the great depression in 2008/9.

Let me say that again, Justin Trudeau inherited a balanced budget. But rather than use the strong position we left him to further pay down Canada’s debt (and strengthen Canada’s fiscal position), like father like son, he chose to spend and started adding record levels of new debt.

Then came COVID.

I am under no illusion that dealing with Trudeau’s debt will be a quick or simple fix. It will take years, likely decades, to correct the dangerous fiscal path he has set us on. But we have not yet reached the fiscal cliff. There is still time to right the ship for Canada.

As with a ship’s rudder, a slight adjustment of the wheel will begin to slowly turn the ship around in the right direction.

Only Conservatives have a plan to get us on the path back to balance.

We need to axe unnecessary taxes that hurt growth and investment, like the Carbon Tax.

We need to reign in discretionary spending. Not essentials like healthcare, public safety, or entitlements but the billions this government wastes on ideological projects (at home and abroad) that have no net benefit to the average Canadian. We will do this with a dollar-for-dollar plan. For every dollar of new discretionary spending, a dollar of savings must be found within government.

We need to get rid of the gatekeepers and red tape that keep affordable homes from getting built a discourage investment that brings jobs and revenue, particularly in our natural resources sector.  

Canadians can’t afford another 9 years of this Prime Minister who’s just not worth the cost.

Only Conservatives have a plan to fix the budget.

We need to do so, before it’s too late.