owe canada

If you spend $10,000 on home renovations, Ottawa will refund you $1,350 in taxes. If you buy your first house, you’ll pocket $750 — not even enough for a decent flatscreen TV in the den.

The halcyon days of federal surpluses are gone.

Ottawa’s spending is out of control again.

And Canadians will pay for decades to come.

Contrary to the find-the-ball-under-the-walnut sales job, Finance Minister Jim Flaherty’s stimulus package has not caused the deficit.

It existed well before the stimulus package was drafted.

But now it’s crystal clear — once again, Ottawa has a spending problem.

And it’s a doozy.

Successive national deficits were identified by Brian Mulroney’s government as a drain on the lifeblood of the nation. It would, eventually, lead our children into the poorhouse, rendering Canada a basket case.

And, past a certain point, getting out of that situation would be damn-near impossible. Or so we were told.

Past deficits accumulated as a result of tax-and-spend policies. That is, Ottawa raised taxes — on tobacco, gas, booze, income and spending (the GST) — and spent the proceeds. And then some.

It couldn’t continue.

So, for the better part of the 1990s, Canada clawed its way out of a position of fiscal deficit. It sacrificed many progressive social programs to do it.

By 2000, Canada’s fiscal discipline had set it apart from much of the G8 — it had started reducing its debt and had cash in the bank.

That fiscal discipline continued through the Chinese boom, which sent commodity prices through the roof.

But the discipline ended three years ago.

After being elected in 2006, Stephen Harper’s Conservative government adopted a new approach to federal budgeting — a tax-cut-and-spend policy.

Business and personal income taxes and the GST were reduced. (Canadians saved two cents on the dollar, Ottawa lost $13 billion a year in potential stimulus funding.)

And, as the federal government took in far less revenue, it increased its spending.

That was OK as long as the global economy was expanding.

However, last year the easy credit ran out.

And that’s exposed the peril of the tax-cut-and-spend model.

By April 1, 2010, Canada will post $15 billion in debt, according to two separate projections by Dale Orr, managing director of IHS Global Insight (a Bay Street economic forecaster), and Kevin Page, Parliament’s budget officer.

Both men say Canada will post a second $15-billion deficit in 2011.

That’s $30 billion in accumulated debt in the next two years.

And that’s before Flaherty’s stimulus package added to the total this week.

With it, Canada’s annual deficit jumps to a staggering $30 billion.

Barring any further economic stimulus, the national deficit is expected to quickly jump to $80 billion in a couple of years.

As of October 31, after much sacrifice, Canada’s accumulated debt is $457 billion.

The forecasters predict more than $100 billion will be added to that accumulated national debt within five years, putting it at 1999’s level, virtually wiping out a decade’s worth of progress on that front.

Canadians must view this week’s budget in that light.

There is nothing grand in the document, nothing memorable — Flaherty has adopted a parade marshal approach to the crisis, tossing candies to a crowd.

If you qualify for employment insurance, you can get another five weeks’ coverage.

If you spend $10,000 on home renovations, Ottawa will refund you $1,350 in taxes.

If you buy your first house, you’ll pocket $750 — not even enough for a decent flatscreen TV in the den.

And, if your household earns $150,000 a year, your taxes will drop enough to buy two iPods.

If it seems crass, it is.

Essentially, a government that has spent freely wants Canadians to spend more. But it doesn’t have much left in the cupboard.

So the most remarkable feature of Flaherty’s scattergun budget is the size of the deficit.

It has alerted people to the fact Canada’s new government has spent its surpluses and contingency funds — it’s now back to printing cash and borrowing money, something Ottawa hasn’t had to do for more than a decade.

Those bills are adding up quickly.

And Canadians must ask, is Tuesday’s budget worth it?

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Dawson City RCMP are reporting a break and enter on Feb. 25 after two masked men entered a residence, assaulted a man inside with a weapon and departed. (Black Press file)
Two men arrested after Dawson City home invasion

Dawson City RCMP are reporting a break and enter on Feb. 25.… Continue reading

Highways and Public Works Minister Richard Mostyn speaks to reporters at a news conference in Whitehorse on Dec. 21, 2017. New ATIPP laws are coming into effect April 1. (Chris Windeyer/Yukon News file)
New access to information laws will take effect April 1

“Our government remains committed to government openness and accountability.”

City council meeting in Whitehorse on Feb. 8. At Whitehorse city council’s March 1 meeting, members were presented with a bylaw that would repeal 10 bylaws deemed to be redundant or out of date. (Crystal Schick/Yukon News file)
Out with the old

Council considers repealing outdated bylaws

A bobcat is used to help clear snow in downtown Whitehorse on Nov. 4. According to Environment Canada, the Yukon has experienced record-breaking precipitation this year. (Crystal Schick/Yukon News file)
Yukon will have “delayed spring” after heavy winter snowfall

After record levels of precipitation, cold spring will delay melt

Yukon RCMP say they’ve received three reports of youth being extorted online. (Black Press file)
Yukon youth being extorted online

Yukon RCMP say they’ve received three reports of youth being extorted on… Continue reading

A man walks passed the polling place sign at city hall in Whitehorse on Oct. 18, 2018. The City of Whitehorse is preparing for a pandemic-era election this October with a number of measures proposed to address COVID-19 restrictions. (Crystal Schick/Yukon News file)
City gets set for Oct. 21 municipal election

Elections procedures bylaw comes forward

A rendering of the Normandy Manor seniors housing facility. (Photo courtesy KBC Developments)
Work on seniors housing project moves forward

Funding announced for Normandy Manor

Tom Ullyett, pictured, is the first Yukoner to receive the Louis St-Laurent Award of Excellence from the Canadian Bar Association for his work as a community builder and mentor in the territory. (Gabrielle Plonka/Yukon News)
Tom Ullyett wins lifetime achievement award from the Canadian Bar Association

Ullyett has worked in the Yukon’s justice ecosystem for 36 years as a public sector lawyer and mentor

The Blood Ties outreach van will now run seven nights a week, thanks to a boost in government funding. Logan Godin, coordinator, and Jesse Whelen, harm reduction counsellor, are seen here on May 12, 2020. (Crystal Schick/Yukon News file)
Blood Ties outreach van running seven nights a week with funding boost

The Yukon government is ramping up overdose response, considering safe supply plan

Ranj Pillai speaks to media about business relief programs in Whitehorse on April 1, 2020. The Yukon government announced Feb.25 that it will extend business support programs until September. (Crystal Schick/Yukon News)
Government extends business relief programs to September, launches new loan

“It really gives folks some help with supporting their business with cash flow.”

Whitehorse City Hall. (Joel Krahn/Yukon News file)
A look at decisions made by Whitehorse City Council this week

Bylaw amendment Whitehorse city council is moving closer with changes to a… Continue reading

Susie Rogan is a veteran musher with 14 years of racing experience and Yukon Journey organizer. (Yukon Journey Facebook)
Yukon Journey mushers begin 255-mile race

Eleven mushers are participating in the race from Pelly Crossing to Whitehorse

Legislative assembly on the last day of the fall sitting in Whitehorse on Nov. 22, 2018. As the legislature prepares to return on March 4, the three parties are continuing to finalize candidates in the territory’s 19 ridings. (Crystal Schick/Yukon News file)
Nine new candidates confirmed in Yukon ridings

It has been a busy two weeks as the parties try to firm up candidates

Most Read