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Finances can't manage themselves

Canada needs to find a better address massive debt

When running for the PM’s job in 2015, Justin Trudeau promised three years of “modest” deficits followed by a $1 billion surplus in 2019. In reality, Trudeau will have increased the federal government’s per-capita debt more than any other Prime Minister in Canadian history who did not face a world war or a recession.  Going back to our Confederation, only three Prime Ministers have increased per person federal debt without facing a world war or recession.  These “dubious” achievers include:

• John Abbott, 1891-1892, who managed a .7 per cent increase
• McKenzie Bowell, 1894-1896, who oversaw a 4.7 per cent increase
• Justin Trudeau, 2015-2019, who gets first place with a 5 per cent increase

This year is a good example of the prime minister’s promises versus reality.  Originally, he promised a $1 billion surplus in 2019, yet indicators now suggest we will actually post a $20 billion deficit this year.  This, of course, is the same individual who told us “budgets balance themselves”.   As any intelligent individual knows, they do no such thing.  

For years, economists have told us that countries in a recession, or involved in war, need to run deficits (either to lift the country out of recession, or pay the war costs).  However, they also have cautioned us that countries not in recession, and not at war, have to run surpluses in order to pay back excess spending.  Most Canadians can understand this balancing act, but our prime pinister apparently cannot discipline himself, and keeps spending at record levels, and borrowing at record levels, to support this spending.   

I thought it might be interesting to take each province in Canada, and record its provincial per capita debt along with its share of the federal debt, so that each citizen understands how much they really owe. Let’s go from best to worst.

• Alberta: Provincial debt is $4,558 per person plus federal debt of $32,589 results in each Albertan owing $37,147 to cover the debt that has been developed.
• B.C. is in second place with a total of $41,095.
• Saskatchewan occupies third place at $42,398.
• Next comes PEI at $46,766.
• Fifth is Nova Scotia at $48,324.
• Sixth is New Brunswick at $50,749.
• Manitoba is seventh with $50,835.
• Number eight is Quebec at $54,195.
• Ontario is ninth at $55,603 (pretty frightening when you think that Ontario’s population is 14.32 million, resulting in a total debt of just over $800 billion for the province).
• Newfoundland is 10th with a whopping $60,350 for every person in the province. Put another way, each family of five in Newfoundland owes $301,750 to pay off their portion of federal and provincial debt (not including CPP or Crown Corporation debts, municipal debts, or their own personal debts). 

Even though Alberta has the lowest combined provincial and federal debt, with 4,307,000 residents in the province, our total debt stands at approximately $160 billion.    

Despite the massive debt in Canada, we stand at a time where great change (and great costs) will be required to solve the problems our nation faces, whether it’s poverty, homelessness, increasing crime rates, declining educational achievement, increasingly expensive medical care, opioid (or illegal drug dependence), global warming, or a host of other problems. Somehow, if we are to afford solutions to these huge problems, we need to find a better way to manage the country’s finances.

Brian McLeod is a St. Albert resident.

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