Once again municipalities, service groups, big business and not-for-profit organizations are in the News this week – getting cheques or at least filing applications for grants.
After years spent by the Liberals and latterly Conservative governments, righting the ship and paying down our debt, the Conservative federal government has chosen to open up the flood gates on spending. The opposition parties were complicit in that, by threatening non-confidence votes if a stimulus package wasn’t presented quickly.
Provincial governments and local municipalities have picked up on that and ratcheted open their pocket books too. It is akin to a feeding frenzy, finding projects to fund – all in the name of stimulating the economy and grabbing cash for as much infrastructure as they can build. From car bailouts to recreational pursuits, the spending season is upon us. Apart from some quiet murmuring, there seems to be little outcry about the financial ramifications, which will hit home sooner than we think.
We cannot help but recall claims a few short months ago during the election that Canada was strong and still on target to post an annual surplus. Now, economists with TD Bank are lamenting the alarming rate with which our operating deficits and long-term debt is increasing.
Over the next five years it is projected Canada’s debt will jump to $630-billion, some 36 per cent greater than today. Along with that is the annual deficit, now suspected to top $50-billion this year, which is far greater than the $32-billion adopted in the last federal budget.
In light of this increasing debt we think back to the photo-ops for reductions in the GST. There were smiles all around, but really, the 2% drop has not made that big a difference in people’s lives. Once the economy does pick up, this particular consumption tax would have been very helpful in paying down the newly acquired debt, but political expediency trumped common sense.
While we recognize that many infrastructure projects are overdue and by opening up spending the government should be able to curtail a prolonged recession, this seemingly blind push to stimulate an overdue economic downturn is creating a bill that will need to be paid. From what we are seeing, it resembles a college kid getting a shiny plastic credit card without the maturity to recognize that with privilege comes responsibility. Most things in life have a cost and it is utterly naive to believe we can escape debt repercussions down the road.
We note with irony that many of the public sector issues like health care, long-term senior care, affordable housing, long-term transit plans and the like remain piecemeal considerations at best within the clamour for funds.
