Canada’s government landscape has become a land of big spenders; unfortunately for the people they are elected to serve, they are not astute spenders of that money.
Consider the news that the country’s combined provincial and federal government debt is set to crest $2.1 trillion this year. That debt total, as pointed out by the Fraser Institute, is nearly double what it was five years ago.
According to the institute’s calculations, the per-person share of net federal and provincial debt now ranges from $42,915 in Alberta up to $64,579 in Newfoundland and Labrador. In B.C., it’s $43,271.
Justin Trudeau is a headliner in government’s land of big spenders. His regime has pumped up federal per-person debt by just over 35 per cent since 2015.
B.C. is also no slouch at debt accumulation. Its net debt has jumped 74 per cent since the 2007-08 fiscal year.
Of course, wrestling with a global pandemic is not cheap, and a lot of government spending supports important social, economic and infrastructure initiatives.
But when it comes to investing in and promoting bottom-line economic productivity, which bankrolls any government’s ability to spend, Canada is mediocre at best.
As the Fraser Institute points out, even though Canada had the second highest increase in gross-debt-to-GDP (gross domestic product) ratio out of 33 countries covered by the International Monetary Fund between 2019 and 2021, it recorded the 11th lowest increase in real GDP growth in 2020 and the 12th lowest in 2021.
Increasingly poor showings in taxation competitiveness compared with international rivals for talent and innovation development, and a growing inability to commit to major infrastructure projects that are needed to tap the country’s vast energy and natural resource potential, are key contributors to that mediocre performance.
Combine that with a chronic lack of political will to make unpopular spending cuts and you have a debt and productivity quagmire that threatens to permanently consign the country to minor league status.