The last several weeks have seen widespread reaction to the Liberal government’s fall economic statement.
Fall economic statements, occasionally called “minibudgets,” serve as mid-fiscal year report cards to update Canadians on the current and future state of the federal government’s finances, priorities, and the projected state of the Canadian economy.
The Finance Minister tried to present the course of her government as “fiscally responsible.” Still, an actual reading of the published numbers shows many worrying trends as we enter the new year.
The two most significant elephants in the room are the statements concerning numbers projected for the growth in unemployment and servicing costs on the national debt.
On unemployment, the statement projects that the federal unemployment rate will rise to 6.5% by the second quarter of next year because of the projected slowdown in the economy.
Such a slowdown in our economy is a uniquely homegrown problem. While U.S. GDP grew by 5.2% in the third quarter of 2023, Canada’s GDP shrunk by 1.1%
The statement shows rising unemployment and a slowdown in the economy.
Working families will feel the pinch with the government’s plan to raise EI Premiums in January, clawing more out of every worker’s paycheck. This increase is also in direct contradiction to a commitment the government made to workers in its budget passed just last spring to not increase EI premiums in 2024.
When such specific commitments cannot be trusted to be upheld after just six months, it makes it harder to trust any of the promises made in this newest statement.
Where we can have confidence, sadly, is in the rapidly increasing cost that Canadians are bearing when it comes to servicing the federal government’s debt load. As announced by the Finance Minister, the federal government’s $ 1.2 trillion debt will require $326 billion spent over the next six years in service costs – that means paying debt interest payments.
These billions in interest payments on an increasing debt will mean that more tax dollars will go towards debt interest payments than healthcare or infrastructure and will instead go to bankers and bondholders.
The government is still committed to raising the floor at which the carbon tax is set by a trajectory of quadrupling it, increasing the cost of basic necessities such as food, gas, and heating.
This increase will come even though the Parliamentary Commissioner for the Environment confirmed that the government is on track to miss their emissions reduction targets and the Parliamentary Budget Officer showing the carbon tax leaves most Canadian households at a net loss.
130 First Nations communities in Ontario collectively recently filed suit against the federal government over the carbon tax as grossly unfair and discriminatory.
Rising unemployment, high-interest rates, and tax hikes are all the lingering effects of 8 years of inflationary deficits run by the Liberal government. They have merged to create a severe and widespread affordability crisis in Canada.
In Kelowna-Lake Country, we are seeing the effects, with a reported 38% increase year over year at local food banks and stated projections at a shocking 100% additional increase over the next 3 – 4 months. I was reported at one that they had seen a 91-year-old as a client there for the very first time in their life.
The United Way BC just released a report on how more BC seniors are facing the potential for homelessness than ever before.
While this fall economic statement may have created photo opportunities for Ministers, it remains a grim reading looking ahead to 2024.
Rising prices, rent, debt, and taxes will only worsen a severe affordability crisis. Unless the government offers a significant change in direction from their proposed course, my common-sense Conservative colleagues and I will vote no-confidence on this Fall Economic Statement.
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