Finance Minister Bill Morneau announced the federal budget on March 22, and the Liberal government is again running a deficit three times larger than promised in the electoral campaign, nearing $30 billion. ($28.6 billion, to be exact.)
They had campaigned on running three modest deficits of $10 billion, and said the fourth year of their mandate would end in a surplus. After all, as Prime Minister Justin Trudeau said, “budgets balance themselves.”
They tried to compensate for their spending with a number of tax hikes. Ubers will now cost more, and so will alcohol. Way to make college life more expensive. But tax hikes can’t completely cover the government’s spending, resulting in the deficit.
So why does it matter if they run a deficit?
In the long term, running deficits like that will hurt our generation. Someone will have to pay back the money they’ve borrowed, and it will be the millennials, the generation Trudeau seemed to be the champion of. But after Minister Morneau said we’re just going to have to get used to job churn, I guess this government has given up on us.
The Conservatives, while in power, ran a number of deficits too. However, in recent years, the previous government managed to bring the deficit down to $5.2 billion in 2013, and 2015 would have arguably ended in a surplus had it not been for the elections. We also have to factor in the global economic recession during the Harper years when looking at previous budgets.
The fact is, the last government was bringing us closer to a balanced budget, but the Trudeau government destroyed all hope of achieving it. Who knows when we’ll finally see a balanced budget again.
We can actually trace back important government spending to our prime minister’s father. In the 1983-84 fiscal year, Pierre Trudeau’s government ran a deficit that would be equivalent to that of around $71 billion today. The Progressive Conservatives under Brian Mulroney weren’t much better. But finally, under Jean Chrétien, followed by Paul Martin, not only was the budget balanced, but there were also significant surpluses.
To balance the budget should always be the end goal of a government. It shouldn’t be a partisan issue—even provincial NDP governments have balanced budgets in the past. We can’t just endlessly spend money we don’t have and hope that the budget magically balances itself.
Putting all the economic impacts aside, what is possibly the most disappointing part about the deficit is that it is yet again another broken campaign promise by the Liberals. Many feel betrayed by this government after approving pipelines and breaking their promise on electoral reform. They broke their promise to be open and transparent as well, as they covered up the potential effects of the carbon tax on Canadians.
At this point, I don’t think we should be surprised by the deficit. It’s no different from last year. But to see the government stray further and further away from every single campaign promise makes me wonder if Canadians will trust them enough to re-elect them in 2019.
