Fiscal and Tax Policy - Op Eds

The federal fiscal snapshot in July projects a pandemic-induced deficit of $343-billion in 2020-21 and a debt-to-GDP ratio jumping to 49 per cent from 30 per cent. Don’t forget provincial debt, too. An Ontarian’s combined government debt-to-GDP ratio will push toward 100 per cent of GDP and beyond.

Such a high debt burden is an ailment that will become threatening when the economy returns to normal operations and interest rates rise. Just as we have done with the COVID-19 pandemic, we should address this ailment head-on. Fortunately, there is an evidence-based treatment plan.

The least painful treatment is to rely on economic growth to reduce our debt burden. However, it is risky to rely on growth alone when interest rates…

Last week’s federal fiscal snapshot unveiled numbers so awful that a reasonable person might suspect an expectations-management exercise. The projected deficit of $343 billion for this year was nearly $100 billion worse than the Parliamentary Budget Officer’s June 18 projection and $40 billion worse than the most pessimistic numbers circulating. If realized, it would be the same as last year’s total federal revenues. It would mean the federal government will borrow more than half the money it spends this year. It would increase Ottawa’s net debt by almost half in one year.

Adding to the impression in the snapshot’s numbers of an unfolding fiscal catastrophe was the absence in its commentary of either any…

The fiscal “snapshot” delivered by Finance Minister Bill Morneau on July 8 was, as its name implied, a static picture – leaving us hanging about what comes next. Like the basketball caught on camera in mid-air as it bounces from rim to rim: Will it go in or out? Or a person teetering on a cliff’s edge: Will she pull back safely or fall? Likewise our fiscally overextended federal government: Will it return to sustainable levels of spending and borrowing, or are Canada’s public finances out of control?

Previous forecasts from the Parliamentary Budget Officer and other projections had muted the shock value of the snapshot’s numbers, but they are alarming. Federal spending in the current fiscal year (2020-21) is now projected to be $…

COVID-19 is hurting more than our health. It has crushed our economy. And it is straining our governing institutions. A case in point is the federal government’s refusal to table a budget.

The C.D. Howe Institute publishes an annual report on the fiscal accountability of Canada’s federal, provincial and territorial governments. Transparency about taxing, spending and borrowing is fundamental to representative government. Budget votes determine whether governments stand or fall. Legislatures must authorize spending through the estimates process. They need timely, full information to do their work.

The fiscal years of Canada’s senior governments run from April 1 to March 31. Governments that present budgets and…

Parliament is being asked to authorize massive amounts of spending to mitigate the economic damage of COVID-19. To best represent the interests of Canadian taxpayers, who some day will foot the bill, parliamentarians need the best picture possible of the underlying context. That should include a fiscal update.

The Prime Minister rejected the idea of a fiscal update last week, arguing that “in this situation any prediction we make will be widely unreliable from one week to the next.”

Many past updates and budgets, vital to the parliamentary process, would have failed the reliability test.

The infamous 1995 budget, widely viewed as tackling a fiscal crisis and putting the country on a sustainable fiscal path,…