VIDEO: [Global News] Jason Clemens explains significance of growing debt-per-person during Prime Minister Trudeau’s period of office. [Feb 21, 2019]
“Today’s federal deficit and mounting debt are the result of discretionary spending, taken with little concern for the immediate risks, long-term impact and the history of deficit-spending in Canada,” said Jason Clemens, Fraser Institute executive vice president and co-author of Federal Deficits Then and Now: Is Canada Repeating the Fiscal Mistakes of 1965 to 1995?
The study finds that, due in part to higher-than-planned government spending and lower-than-forecast government revenue, the federal government ran budget deficits every year (except one) from 1965 to 1995 (when the federal debt increased from $17.2 billion to more than $500 billion) until a period of reform beginning in 1995.
Fast-forward to 2015, when federal finances were on track to budget balance, the newly-elected federal government increased spending immediately after entering office, resulting in a deficit instead of a balanced budget. The federal debt is now close to $700 billion and projected to total almost $1 trillion by 2040/41.
Crucially, since 2015 actual federal spending has exceeded budgeted spending. For example, in 2018, despite higher-than-expected revenue, Ottawa spent $8.0 billion more than originally budgeted with no improvement in its deficit. We saw similar trends during the 1965-1975 period when the federal government routinely spent every dollar of its higher-than-expected revenues.
This article continues at [Fraser Institute] Liberals set to repeat deficit mistakes of the twentieth century