The Canadian Taxpayers Federation is criticizing Finance Minister Chrystia Freeland for failing to provide a plan to balance the budget and rein in spending.
“Freeland is giving taxpayers another credit card budget with no plan to pay the bills on time and chip away at the $1-trillion debt,” said Franco Terrazzano, Federal Director of the CTF. “Freeland is taking the wait-and-see approach to the government’s credit card bills and hoping the economy can grow faster than its borrowing, but that’s not a good bet with its track record of runaway spending.”
The deficit is expected to be $52.8 billion this year. Budget 2022 does not include a plan to balance the books.
The debt is projected at $1.2 trillion by the end of the fiscal year. Budget 2022 is adding another $148 billion to the debt by 2027. At 45.1 per cent, the 2022 debt to GDP ratio remains higher than pre-pandemic levels, which were close to 30 per cent.
The federal government’s spending is projected to be $452.3 billion this year, which is $89.4 billion above pre-pandemic spending in 2019. The federal government’s spending was at all-time highs before the pandemic.
Interest on the debt is projected to cost taxpayers $26.9 billion this year.
“Interest charges on the government’s credit card is costing taxpayers more than $2 billion every month,” said Terrazzano. “Every month taxpayers pay more in federal debt interest charges than the Alberta government spends on health care.”
Budget 2022 raises taxes on banks and insurance companies and imposes a so-called anti-flipping home tax. The government is providing relief for some medium-sized businesses by increasing the eligibility to the small business tax rate. It’s also removing the excise tax on low-alcoholic beverages. However, the government increased payroll, alcohol and the carbon tax in 2022.
“The government is talking about making life more affordable, but people are struggling to fill their cars with gasoline and pay for ground beef at the grocery store because Ottawa is spending like crazy and raising taxes,” said Terrazzano. “Trying to ease inflation with more government debt is like trying to put out a fire with gasoline.
“Freeland should lower taxes and end the runaway spending to make life more affordable.”