Balanced budget in 2040? Too long to wait, says taxpayer group

Published Sep 04, 2024  •  2 minute read

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OTTAWA — After a recent report suggested the federal government won’t balance its budget for another 16 years, Canada’s taxpayer watchdog is calling on the Trudeau Liberals to rein-in spending.

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The Canadian Taxpayers Federation (CTF) said on Wednesday that the prediction Canada won’t balance its books until 2040 — published last week in a supplementary data table in the Parliamentary Budget Officer’s (PBO) latest Fiscal Sustainability Report —  was an ear-splitting siren to the government.

“Canadians need the federal government to balance the books ASAP, so we can get tax relief and stop wasting billions of dollars every year on debt interest charges,” said Franco Terrazzano, the CTF’s federal director.

“Trudeau needs to put down the credit card and pick up some scissors.”

This overspending, he said, leads to debt servicing charges that cost taxpayers tens of billions of dollars every year.

“That’s tens of billions that can’t be used to improve health care or lower taxes, because that money is going to the bond fund managers to pay interest on the government credit card,” Terrazzano said.

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In a press release issued alongside the report, Parliamentary Budget Officer Yves Giroux insisted Canada’s current fiscal policy is sustainable over the long term, while adding that Quebec, Saskatchewan, Nova Scotia, Ontario and Alberta all have enough fiscal wiggle room to either reduce taxes or increase spending.

“Although we saw a record population growth in 2023, we must bear in mind that many Canadians will be retiring from their peak working years, resulting in slower workforce and GDP growth,” Giroux said in the statement.

“This aging population will put upward financial pressure on government programs such as health care, Old Age Security and public pension benefits.”

The PBO’s math, Terrazzano said, relies on no new spending and steady economic growth between now and 2040.

“Waiting until 2040 to balance the budget is outrageous, and the government won’t even hit that target if the economy has a hiccup or politicians can’t say no to new spending,” Terrazzano said.

“This government has given taxpayers every reason to believe it will never balance the budget.”

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