And while her request does not necessarily equal action, the possibility is concerning. To reach the 2% of GDP goal would mean spending around $12.4 billion more each year. Additionally, as a result of the current war in Ukraine, the Trudeau government has placed sanctions on Russia which has resulted in a hit to Canada’s energy sector. These impacts will continue so long as the sanctions persist. And this increase in spending isn’t only related to international issues. In March of 2022, the NDP and Liberal Party announced what can effectively be called a power-sharing agreement. NDP members of parliament will support the Liberal government, and in exchange, the Liberals will implement a few programs at the NDP’s request. One of these programs involves provision of dental care for all Canadians. It is hard to argue against the benefits of such a program given the positive health effects from consistent dental care. However, the budget it requires is not trivial. According to estimates cited by CBC News, this proposed program will require $4.3 billion for the first year, and following that, $1.5 billion each year. Clearly, there is a significant cost. Looking at the Canadian government’s debt management report, in 2020, the total market debt amounted to $765.2 billion. By the end of 2021, it had increased to approximately $1.1 trillion. This means that in the past year, we have increased the debt more than we have in the last ten years combined. While it can be argued that this increase was necessary in order to offset the economic impact of COVID, the question remains: is now the time to be making costly investments in new social programs? At what point does THE OBSERVER
the government stop funding new programs and start making decisions that lead to a reduction in public debt? A few weeks ago, the Bank of Canada increased their interest rates by a relatively small amount - this is only the first of several expected increases over the next couple years. As a result, the current debt will be much more costly to service. I’m not advocating that we try to wipe out our national debt completely by the end of Justin Trudeau’s term. However, the devil-may-care attitude of continuing to spend without acknowledging the massive amounts of debt accumulating over the course of his term is not only unwise, but irresponsible. These programs are beneficial to many, but the government’s job includes management of its finances as well as its programs. Just because we can spend this much doesn’t mean we should. If the last two years have taught us anything, it is that the future is very unpredictable, and more challenging (and costly) events are nearly inevitable in the coming months and years. As the new federal budget is released, having the financial reserves to deal with future uncertainties is important to all Canadians. When the next event happens, will we be prepared? Adequate preparation needs to include having the financial resources XVIII.3 26.
