On course for $1.55 trillion debt
Back in late December the Liberal Government quietly released a rather ominous report from the Department of Finance that related to future debt projections based on the government’s current fiscal policy direction.
The report indicated that unless there is a change in course Canada will continue to see annual deficit budgets until at least the year 2050. By that time Canada’s debt will have reached a rather staggering level of $1.55 trillion dollars.
This of course stands in stark contrast to the return to a balanced budget in 2019 promise made by the Liberals prior to the last election. It is no wonder that the Liberals, it has since been reported, delayed releasing this report until Friday, December 23 instead of early October when it was first shown to the Finance Minister.
With so much newly created Liberal debt the question to be asked is where is this money all going?
The Liberals will continually reference one of the areas of increased spending is infrastructure. In the past the former Conservative Government also significantly increased spending on infrastructure and in reality all levels of Government engage in infrastructure spending.
With that in mind for this week’s report I would like to share more information regarding the Federal Government infrastructure spending as it will be current and increasingly future generations of Canadians who will be paying for it.
Currently the government has announced $186.7 billion in planned infrastructure spending. However on closer inspection that $186.7 billion is being spent over the next 12 years. Roughly $100 billion was already allocated for as regular infrastructure spending while the Liberals have called for a further $82 billion increase of “new money” to raise that amount to reach the $186.7 billion figure.
What is more interesting is that only $13.6 billion of that $186.7 billion will be spent over the next two years Canada wide. This is an important figure because for the first eight months of 2016 the Liberals ran a budget deficit of $12.7 billion and are estimated to hit a deficit over $25 billion this year alone.
In other words infrastructure spending is in large part not to be blamed for the Liberal Government massively increasing deficits and growing debt.
From another perspective when looking at the $ 12.7 billion that is forecast to be spent on Infrastructure between 2016 and through to 2018 currently the Parliamentary Budget officer could only identify $4.6 billion in actual projects meaning that as much as debt continues to increase many of the announced infrastructure dollars have yet to make it out to communities where they can provide economic and societal benefit.
From a political perspective the timing is very interesting. While the Liberals have announced a significant $186.7 billion of spending on infrastructure and continue to cite increased infrastructure spending when queried on significantly increasing debt, in reality very little of the announced infrastructure spending will have occurred by 2018, in theory just $ 12.7 billion.
More troubling is that of that $12.7 billion, much of that has yet to be allocated. This means that by 2019, which just so happens to be an election year, the Liberals will need to significantly accelerate their infrastructure spending which has not, to date, kept pace with how fast the same Liberal Government has been accelerating deficit budgets and increased debt.
As the Deputy Finance Critic the fact that the current rise in debt and deficits is clearly un-related to increased spending on infrastructure is a serious concern. Basically this situation means that current program spending is unsustainable and is potentially creating a structural deficit that will present serious challenges for future generations of Canadians.
My question for this week is how concerned are you at the lack of progress on getting infrastructure projects going contrasted against the growth in deficit budgets and debt? I can be reached at Dan.Albas@parl.gc.ca or call toll free 1800-665-8711.
Dan Albas is MP for Central Okanagan Similkameen Nicola and member of the Conservative caucus.