Did they say fairness for younger generations?

The federal budget just passed is billed as an exercise in providing a fairer playing field for young Canadians who are having a tough time buying a house, finding a reasonably-priced apartment, dealing with higher prices on just about everything. To that end, the government promoted all the stuff it thought would be popular in the weeks before Budget Day – $1 billion national school food program over the next five years; $8 billion over 5 years for a new national defense policy; $1.5 billion for a new Canada Rental Protection Fund; $600 million in loans and funds to help new owners and renters; 30 year mortgages for new home buyers; $2.4 billion for the AI industry. And before that, specific pharmacare coverage for diabetes and contraception, estimated at $1.5 billion/year and phased in dental care estimated at $4 billion/year.

It is unclear how this budget makes a fairer playing field for young Canadians. For one thing, most of what’s promised is over 5 years, which means this government has to be elected to a majority in October 2025 for these promises to be kept. That’s an uphill battle -- more Canadians (62 percent) are angry or pessimistic about the federal government than at any point in the last six years, according to a Nanos survey. Aside from this, Canada’s finances make it clear that we can’t afford to pay for these new programs – we haven’t been raising enough tax revenue to support many of the programs that have been on the books for years.

Excessive government spending and borrowing discourages private sector investment that creates jobs and innovative processes that can grow the country out of debt. The government now spends more on debt interest than on health-care transfers to the provinces. This debt increases the tax burden on future generations of Canadians who are ultimately responsible for paying it off. Yet for all this spending and debt, living standards have not improved. In fact, inflation-adjusted GDP per person was lower at the end of 2023 than it was five years ago. How is this fairer to younger Canadians?

The budget is not an easy document to read – 430 pages is one indication that the feds weren’t all that anxious to have us read it. Yet it was a lost opportunity to lay the facts out plainly and suggest a course of action that would be good for all of us a few years down the line. Here are a few things everyone in the business of getting Canada on the right track agrees with:

First, our basic tax system is out of whack and way too complicated. It hasn’t had a comprehensive overhaul since 1967, and a lot has changed since the glory days of our Centennial. We need tax reform in the worst way -- the basic personal exemption is too low, there are dozens if not hundreds of obscure tax credits that are expensive to administer and not worth a taxpayers’ time to claim. The size of the federal public service increased 40 percent under this government, and total compensation for federal bureaucrats (adjusted for inflation) has increased by 35 percent. Getting rid of ‘boutique’ tax credits would not only simplify the tax code, but it would also reduce the cost of government.

Way back in 1987, Michel Wilson, Brian Mulroney’s Finance Minister started down the path of fiscal restraint and tax reform, calling for lower rates and a fairer system. He gave us the GST, an unpopular move then, but now one that few would rescind. The Campbell, Chretien, Martin and Harper governments steered clear of tax reform except to add to the myriad credits and complications. (To be fair, the Chretien and Matin governments reduced the deficit.) Now, despite what you hear about the budget measures making life fairer for young people, it is in fact doing the opposite.

It’s not easy to do what’s required. And it won’t happen in one year. It will take a majority government its full four years, and only if it cares more about the future of the country than its own political fortunes.

It is unclear how this budget makes a fairer playing field for young Canadians. For one thing, most of what’s promised is over 5 years, which means this government has to be elected to a majority in October 2025 for these

promises to be kept.