Freeland is trying to fight inflation fire with gasoline

Author: Franco Terrazzano 2022/06/16

OTTAWA, ON: The Canadian Taxpayers Federation is criticizing Finance Minister Chrystia Freeland’s plan to address inflation with more government spending instead of controlling spending and providing tax relief. 

“Freeland 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 Franco Terrazzano, Federal Director of the CTF. “Trying to put out the inflation fire with more government spending and debt is like trying to put out a fire with gasoline. Instead, Freeland needs to rein in overspending and lower taxes.”

Freeland outlined $8.9 billion of spending in an attempt to address inflation. 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 and higher than forecasted spending in the previous budget. The federal government’s spending was at all-time highs before the pandemic. 

The Bank of Canada printed more than $300 billion during the pandemic by buying financial assets, such as government of Canada debt. The more dollars the central bank prints, the less Canadians’ dollars buy. 

The federal government raised the carbon tax three times during the pandemic. Prime Minister Justin Trudeau says he will raise the carbon tax to nearly 40 cents per litre of gas by 2030 and impose a second carbon tax through fuel regulations that is projected to add an extra 11 cents per litre. The federal government also raised payroll and alcohol taxes during the pandemic.

Other jurisdictions are providing tax relief at the pumps to ease inflation. The United Kingdom announcedabout $8 billion of fuel tax relief. South Korea cut its gas tax by 30 per cent. Germany is cutting taxes on motor fuels. The Netherlands cut its gas tax by 21 per centItalyIrelandIsraelIndiaPeruPoland25 Indian states and union territoriesNewfoundland and LabradorAlbertaNew Jersey and Florida are also cutting gas taxes.

“Freeland is not showing fiscal restraint and the government’s only plan is to spend buckets of taxpayer cash,” said Terrazzano. “The government should try taking less money from Canadians’ pockets like other countries.”