Trudeau Liberals' fiscal update puts Canada on path of debt and stagnation

There was widespread, bipartisan support for large-scale financial support for Canadians amid the China Virus pandemic.

For example, before the Liberals had proposed sending out money to Canadians, I was calling for everyone to get $2,000 quickly, to prevent an economic collapse as the economy shut down.

The Opposition parties also supported the CERB program, and it was a bipartisan effort to ensure Canadians had the support they need.

Since then however, the Liberals have moved from temporary crisis measures, to what looks like a dangerous expansion of the centralized federal government. We are watching the Liberals add on to the largest deficit in history, with $100 billion in additional spending.

However, there is something more concerning than the dollar figure, it’s where the Liberals plan to spend it.

Imagine for a moment if the Canadian government brought in big tax cuts for low income and middle class Canadians, provided support for key Canadian industries like energy and manufacturing, eliminated the carbon tax, strengthened our military spending, and actually started to build real, tangible infrastructure.

We would see a massive economic recovery, a surge of good-paying jobs, and a rise in prosperity that would benefit Canadians across the country.

That would be a way to make $100 billion in spending turn into real economic growth and long-term benefits.

But instead, what the Liberals are doing is to push for spending on expanded government programs, creating new and larger bureaucracies, while doubling-down on their "green agenda," meaning more taxes, more regulations, and more limits on economic growth.

For example, there is already a new fuel tax, the carbon tax is going up, and there’s a new tax coming on streaming services, meaning more money will be taken out of the pockets of Canadians who are already struggling.

History has shown that large surges in debt are sustainable, but if—and only if—they are followed by strong GDP growth.

But we have never seen a government massively rack up debt, then simultaneously sacrifice economic growth on the altar of politically-correct international schemes.

The Liberals are piling on the debt, while imposing policies that will severely weaken growth, making it extremely difficult for our country to handle that debt.

What that means is, that when interest rates grow up, or even when confidence in our ability to pay that debt starts to diminish, things could take a turn very quick. And, considering that Canadians have some of the highest levels of indebtedness in the world, the damage will be significant.

That will lead to debt-ridden stagnation, with more and more of our spending taken up by paying off debt, leaving less for tax cuts, and less for essential programs. It’s not a future any Canadian should want to see our nation subjected to.