Generous politicians are unaffordable

The fiscal update delivered by federal Finance Minister Bill Morneau on Tuesday contained good news. This year’s deficit won’t be the $28.5 billion it was projected to be. An extra $8.9 billion will be injected into federal coffers, resulting in a $19.9-billion deficit, including $1.5 billion set aside as a financial cushion.

One could be forgiven for thinking such good fortune would reduce the amount of government borrowing that taxpayers — largely our children and their children — will have to reconcile in the future. Instead, the Liberal government is opening the vault, committing an extra $1.8 billion in unanticipated spending this year alone, along with hundreds of millions in years to come.

Morneau calls the government’s increased spending “doubling down on what we’ve done for families.” The finance minister perhaps intends his remarks to be seen as a raising of the stakes to improve the lives of ordinary families, but the boast is evidence of just one more gambler waging a foolish bet. He’s admitted the Liberals have no idea when they’ll balance the books, proving that prudent budgeting isn’t behind the government’s spending, just a worrying penchant for borrowing.

It’s the same at the provincial level in many provinces. In Alberta, for instance, Finance Minister Joe Ceci delivered a third-quarter report that showed revenue was $1.5 billion higher than expected, in part due to stronger energy royalties. But instead of using the windfall to trim borrowing, the NDP ramped up spending by $2.6 billion.

“For quite some time now, we’ve heard the finance minister saying, ‘It’s a revenue problem,’ ” Paige MacPherson, the Canadian Taxpayers Federation’s Alberta director, said at the time. “Here they have found this cash and chosen to increase spending instead of chipping away at that deficit.”

MacPherson’s observation applies equally to the federal government. There’s no certainty the Canadian economy will continue to grow, especially with renegotiation of the North American Free Trade Agreement in doubt.

The combined federal and provincial net debt was an estimated $1.3 trillion in 2015-16, according to the Fraser Institute, or $35,827 for every person. All levels of governments — including municipalities — collectively spent an estimated $60.8 billion on interest payments in 2014-15, or 8.1 per cent of their total revenue that year. That’s about the same as what was spent on primary and secondary education that year.

It’s time governments understood that Canadians can’t afford politicians to be so generous with our money. — Postmedia Network