Trudeau government should honour their commitment to get back to balance, and stop piling more debt on the backs of future generations

Here's how to balance the federal budget

By -- Aaron Wudrick, Federal Director—— Bio and Archives--February 16, 2018

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Here's how to balance the federal budget
During the 2015 election campaign, the Trudeau Liberal platform was clear: if elected to form a government, they would run three “modest” deficits of under $10 billion per year, with a return to balance in the fourth year.

So how have the Trudeau Liberals fared so far?

Rather than the promised “modest” deficits, they’ve run much larger ones: $17 billion for 2016-17, and $19 billion for 2017-18. In the process, they have added almost twice as much public debt as originally promised. Even worse, they have still not presented any plan whatsoever to get back to balance (although thankfully, the Department of Finance’s long-term fiscal projections show the government is still on track to balance by … 2045.)

What could explain this lack of effort? It’s fair to say the Trudeau government has had their hands full renegotiating NAFTA with the Trump administration, while Finance Minister Morneau himself spent the past half year trying to extricate himself from the fallout of his ill-conceived small business tax changes. So, it’s entirely plausible that they simply haven’t had the time to go looking for ways to save taxpayers money.

In that spirit, the Canadian Taxpayers Federation would like to present a few helpful suggestions on how the Liberals could balance the budget in two years based on the forecast in the 2017 Fall Economic Statement, which shows a projected $14.3 billion deficit for 2019-20.

Eliminate corporate welfare: Ottawa should stop meddling in the marketplace and let businesses sink or swim on their own merits. Ending the subsidies going into the pockets of private businesses would save taxpayers at least $3.2 billion.

Get rid of regional development: Building horseshoe pits or gazebos and bankrolling tourist information centres or snowmobile trails may be great photo-ops for politicians, but they don’t create sustainable economic enterprises. Time to put the lid on the barrel of regional development pork and save at least $858 million.

Index transfers to other levels of government to the rate of inflation: Transfers from Ottawa to other levels of government amount to around $70 billion annually, with planned increases each year. Limiting these annual increases to the rate of the inflation would save a total of $3.5 billion.

Reduce government operating expenses back to 2016-17 levels: Departmental and agency operating expenses have ballooned since the Trudeau government came to office. A little less bureaucracy would go a long way: simply reducing them back to the level in the first Trudeau budget of 2016 would cut the deficit by $5.1 billion.

Reduce spending at the Department of Canadian Heritage: From expensive skating rinks to films that nobody watches, much of what Heritage does amounts to nothing more than make-work projects. Cutting its budget in half would save $650 million.

Reduce foreign aid spending: Canadians are a generous people and want to do our part to help alleviate suffering around the world. But with big deficits at home and many Canadians struggling as well, there’s a limit to what we can afford for now. Reducing foreign aid spending by 25% would save $1.35 billion.

Adding up all of this up totals $14.6 billion, which would leave a surplus of $300 million, which the government could put towards paying down our whopping $650 billion of federal debt.

This roadmap is just one path to balance – and if the government disagrees with any of these suggestions, there are dozens more departments, agencies and Crown corporations that could be looked to for additional savings. However they do it, the Trudeau government should honour their commitment to get back to balance, and stop piling more debt on the backs of future generations.


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Canadian Taxpayers Federation -- Aaron Wudrick, Federal Director -- Bio and Archives | Comments

Canadian Taxpayers Federation

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