The following article appears in the July 2010 issue of The Landowner magazine.
“I know what you’re thinking. ‘Did he spend $60 billion or only 50?’ Well, to tell you the truth, in all this excitement and stimulus I kind of lost track myself. But being as this is an overtaxed country with a half trillion dollars in debt already and growing, you’ve got to ask yourself one question: Do I feel lucky? Well, do ya, taxpayers?”
That’s not a direct quote from Clint Eastwood in Dirty Harry, but it’s close enough. The Canadian Taxpayers Federation (CTF) certainly doesn’t feel lucky about our prospects as a country if current spending continues unabated. While we already owe a massive sum to our bankers: $500 billion in accumulated debt, the new debt being added via the deficit announced in the last budget, will amount to more than $10,200 per taxpayer between now and 2014. That figure will continue to balloon as interest on the debt begins to compound. Canada is adding more debt right now than was added during both World Wars combined, even after adjusting for inflation. You can see our national debt rack up in real time at www.debtclock.ca.
For those not feeling so lucky, the CTF has produced a Zero in Three Deficit Action Plan to balance the budget in three years. This can be done through a combination of spending freezes, trimming of department budgets and where necessary, reductions. Politicians may excuse themselves from any spending cuts in claiming that a recovery in revenues will balance the budget, but quite simply, they’re wrong. Program spending has skyrocketed by more than 60 per cent in only six years – beginning long before so-call stimulus spending – and add to that the retirement of the baby boomers now beginning and Canada faces a structural deficit that will remain long after revenues recover.
The CTF’s plan would only reduce spending by 10 per cent, returning us to 2008 levels over three years finding a total of $35.8 billion in savings. In addition to moderately trimming department budgets and accounting for already scheduled decreases in “stimulus,” the CTF plan would eliminate $5.5 billion in corporate welfare. This means turning off the taps to private corporations that subside on the taxpayer’s dime while at the same time resisting money-sucking schemes like Kyoto and Copenhagen that will create entire new bureaucracies and dependent faux-businesses.
Equalization eats up $14.8 billion every single year and has only served to make recipient provinces even poorer and more dependent. The CTF plan would convert this from a ‘federal welfare program’ to a program to help pay down provincial debts, and then reduce the amount provided by 10 per cent each year. That would provide cumulative savings of more than $1.4 billion every year while helping poorer provinces to become proudly self-sufficient again.
Since the creation of two new “regional development” agencies by the Harper government, every single area of the country now has a government agency designed to take money from one part of the country and redistribute it elsewhere. This nonsensical logic makes it low-hanging fruit for anyone serious about balancing the budget. Savings to the taxpayer: $1.2 billion every year.
Canada also has several crown corporations that eat up excessive amounts of money. While not all candidates made the list to be cut, those that did make the chopping block would save taxpayers at least $1.2 billion annually, not to mention one time reductions to our debt from the proceeds of selling them.
All told, there is an abundance of areas that the government can easily look to in order to get its finances under control. Even holding the line on spending – which it should have done when it come to power – won’t bring the books into black. Program spending was already at unsustainable levels when Prime Minister Harper came to power.
During the Trudeau and Mulroney years, the government books often showed the budget coming into balance without any cuts a few years down the road as revenues increased, yet they never did. The government today – with deficits on par with those prime ministers – is making precisely the same argument. They know, just as previous governments before, you can’t balance your budget by doing nothing.
The jig is up and we know what needs to be done, so come on Mr. Harper, make my day.