Unsustainable and Stupefying State of Affairs
When Parliamentary Budget Officer (PBO) Jason Jacques labels Canada’s fiscal situation “unsustainable,” “stupefying,” and “shocking,” this is not just rhetoric. Appearing before the government operations committee only hours after releasing his latest report, Jacques disclosed that this year’s deficit has ballooned to $68.5 billion. His warning could not have been clearer: federal borrowing is nearing a breaking point. “Something is going to break,” he cautioned — and Canadians should be paying attention.
Shortly after the PBO’s alarming comments, Conservative Leader Pierre Poilievre noted in an interview how the independent budget officer is not typically prone to using such strong language. In fact, he quipped, most PBO reports could double as a cure for insomnia. His point emphasizes how unusual to witness such passionate adjectives are in such monotonous documents.
But the words expressed by the PBP last week were “chosen carefully” explaining that “anyone who has managed a household budget knows that if you sit down at the end of the month and you don’t have enough money to pay your bills and it happens month after month after month, you know something is going to break.” Using the word “unsustainable” means one doesn’t have the option of saying, “maybe I’ll wait a couple of years, I’ll see how things go. It means if you don’t change, this is done.” Which might better enlighten us to why he also included the word “alarming” among his descriptors.
As the terms “deficit” and “debt” are often confused, its worth clarifying: the “deficit” is the amount the government must borrow in a single year to cover its expenses. The debt is the total accumulation of all previous deficits.
The $68.5 billion dollar deficit the PBO disclosed is expected to be the first in a series of $60 billion plus annually for the near future. This year’s accumulated debt of $1.35 trillion results in $55.3 billion spent annually on interest alone. By 2027-28, the debt is projected to reach $1.5 trillion, with debt service costs ballooning to $66.8 billion. To put that in perspective, this year’s deficit is almost one third higher than last year’s deficit of $51.7 billion. And this with the exclusion of Prime Minister Carney’s defence spending promise of 5% of Gross Domestic Product (GDP), $13 billion for a new housing bureaucracy, and potentially up to $20 billion in additional spending forecasted from the Liberal platform.
To further illustrate, taxpayers are paying more in interest charges at $55.3 billion, than we are in healthcare at $54.7 billion dollars.
Election promises seem quickly forgotten. Just months ago, Canadians were promised Canada would build the fastest growing economy in the G7. Today, we are the fastest-shrinking economy in the G7 — All this before the first budget has even been tabled.
Just when it seemed things couldn’t get any worse, the new Liberal government is spending more than even the Trudeau Liberal government. Consultant costs are climbing by an additional $7-8 billion, foreign AID is increasing, our bureaucracy is ballooning, and more cheques are being written to large multi-national corporations.
The point is clear: lessons are not being learned and are failing to sink in with this Liberal government. As the PBO warned, “every Canadian should be concerned.”
Conservative Leader Pierre Poilievre quoted Kipling in his closing thoughts last Friday on a morning radio talkshow:
“Just As the Dog returns to his Vomit and the Sow returns to her Mire,
And the burnt Fool’s bandaged finger goes wabbling back to the Fire;
The words are believed to have been inspired by the book of Proverbs where the stubbornness of fools causes a repetition of the same old same old. Conservatives keep harping on the reality that we simply can’t keep doing the same thing over and over again and expect different results. The PBO is sounding the alarm in agreement.