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“This high level of deficit-financed spending will have to be repaid eventually, and that will have implications for future taxpayers who will face tax hikes to pay for today’s spending.”

The ‘new normal’ of federal spending is at unprecedented levels; will exceed $13,000 per person this year



VANCOUVER— Per-person federal program spending is expected to reach a minimum of $13,032 in 2021/22 (adjusted for inflation), which is 34.8 per cent higher than in 2019, pre-COVID, finds a new study released today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank. Prior to the recent election, the federal government’s spending plans would have resulted in per person spending of $12,695. However, the Liberals proposed additional spending in the election that will bring per-person spending to $13,032 in 2021/22, and the NDP, the Liberals’ likely governing partner, proposed even higher spending that would result in per-person spending reaching $13,735.

Prime Ministers and Government Spending

“These levels of spending are unprecedented in Canadian history even when compared to other times of crisis, like recessions and wartime,” said Jake Fuss, senior economist at the Fraser Institute and co-author of Prime Ministers and Government Spending, Updated 2021 Edition. Consider that the minimum level of per-person spending expected in 2021/22 is 42.4 per cent higher than the level of spending recorded during 2009, a pronounced global recession: $9,155 versus $13,032. Critically, after adjusting for inflation, per-person spending in 2021/22 (again, between $13,032 to $13,735) is also projected to be 64.8 per cent to 73.7 per cent higher than it was at the peak of World War II. And even though per-person spending is expected to decrease slightly in 2022/23, to between $10,846 and $11,446, it is still projected to be 12.2 per cent to 18.4 per cent higher than per-person spending levels were 2019/20, the highest level of per-person spending pre-COVID. “By all indications, the new normal level of federal program spending is substantially higher than even the record-high levels of spending we saw pre-COVID,” Fuss said. “This high level of deficit-financed spending will have to be repaid eventually, and that will have implications for future taxpayers who will face tax hikes to pay for today’s spending.” Media Contact: • Jake Fuss, Senior Economist, Fraser Institute To arrange media interviews or for more information, please contact: Drue MacPherson, Fraser Institute drue.macpherson@fraserinstitute.org

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Fraser Institute -- Bio and Archives

The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of 86 think-tanks. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute’s independence, it does not accept grants from governments or contracts for research. Visit fraserinstitute.org.

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