The Canadian federal budget is on track to be balanced – but it won’t happen until 2041.
That’s the warning from the Canadian Taxpayers Federation (CTF), a taxpayer advocacy group known for exposing the dangers of high government spending and rapidly increasing debt.
“Taking another two decades to balance the budget is too long and even that target won’t be met if interest rates tick up, the economy doesn’t grow every single year or politicians can’t find the willpower to say no to new spending,” said the federal director of the CTF Franco Terrazzano.
Earlier this week, the CTF released a report using data published by the Parliamentary Budget Office, looking at the trajectory of the federal government’s 2022 budget.
The CTF believes debt interest charges will cost taxpayers $802 billion by the time the government balances the budget.
In its report, the taxpayers group outlined a number of conditions that would need to be in place in order for the federal budget to be balanced by 2041, including an average annual interest rate of 2.5% and no new spending announcements.
However, Terrazzano is skeptical about the government’s ability to stop spending.
“When campaigning to be prime minister, Justin Trudeau initially said he would run a few ‘modest’ deficits before returning to a balanced budget in 2019. The government was set to miss that balanced budget by $20 billion even before the pandemic,” said Terrazzano.
“Taxpayers have every right to be skeptical that this government can exercise enough restraint to balance the books by 2041.”
The economic situation in Canada is growing dire on a daily basis, with many economists predicting a looming recession.
While the Trudeau government originally dismissed the inflation crisis as a “global phenomenon,” the government unveiled its “affordability plan” as a means to combat inflation in June. This plan included $8.9 billion in government programs.
Many economists have pleaded with the government to stop spending, arguing that the burden of lowering inflation is falling on the private sector as the government continues to spend at record levels.