Federal Finance Minister Joe Oliver had some welcome news during the release of the fall fiscal update: Canada’s federal deficit is projected to finally be eliminated next year. With a surplus now expected for 2015-16 and an election under a year away, the political battle lines have started to be drawn.
The government is promising tax breaks, mainly in the form of income splitting for families, as well as direct payments to families with children. The NDP is countering with an expensive new national childcare program, modelled after the failing Quebec system.
Oddly enough though, there’s one big issue – massive in fact – that doesn’t seem to be a big part of the discussion. It’s our federal debt.
You may be surprised to hear Canada’s federal debt alone (which doesn’t count any provincial or municipal debt) is currently at around $613 billion. That’s an increase of $154 billion since 2008, when the government made the unfortunate decision to plunge us into deficit in the name of fighting the recession. Canada’s debt is more than double the amount of all the money the federal government spends in a single year.
Six years later, the light is at the end of the tunnel, and we’re close to being able to say we are no longer adding any new charges to the national credit card. Great news – except that doesn’t change the fact we’ve still got an eye-watering balance of $613 billion to pay off, which is racking up interest by the minute.
Thankfully, interest rates are low for the moment, but even now it costs more than $28 billion a year to service our debt. That’s $28 billion that could have been spent on other things important to Canadians – or put back in their pockets.
It is a strange irony that the same politicians, who often talk about the need to invest in government programs, or to protect the environment, justify their policies as benefitting “future generations,” and yet they have little to say about our public debt load.
They speak about fighting unfairness and injustice – but not when it comes to the unfairness and injustice of future generations being stuck with the bills being run up by those of us consuming today.
The government, to its credit, has made some positive statements about reducing the federal debt; by pledging to get it down to below 25 per cent of our GDP by 2021 (it currently stands at around 32 per cent). This isn’t good enough. Arguably, these targets could be met by modest growth in the economy, without one red cent going towards debt repayment. The more aggressively we tackle the debt, the more money we free up for other things – whether government spending or (hopefully) tax relief, and the less burden we leave on future generations.
There is no hiding from the elephant in the room. Over the next year, the public should demand all parties come clean about what their plans are to tackle our debt. The well-being of future generations depends on it.
– Aaron Wudrick is federal director of the Canadian Taxpayers Federation.