Montreal, April 7, 2022 – On the occasion of the tabling of the 2022-2023 federal budget, the MEI’s researchers updated their federal debt clock and called on the Trudeau government to rein in the growth of public spending and address current economic problems efficiently and reasonably.
Inflation and debt, a bitter combo
With the tabling of each federal budget, the MEI updates its debt clock. The federal government alone now has a debt of almost $1.3 trillion. This is equivalent to more than $32,800 per Canadian, or $43,400 per taxpayer who fills out a tax return.
“With interest rates rising, the topic of the indebtedness of the federal government, and therefore of taxpayers, must return to the fore. The federal debt is growing by more than $145 million a day. That’s unsustainable! It’s going to push the $26 billion we now pay in interest on the debt in a year up to nearly $43 billion in 2026,” explains Olivier Rancourt, Economist at the MEI.
“Moreover, the worrisome rise in inflation has become an obvious problem. The federal government has to stop stoking this hidden tax on the less fortunate and the middle class. The government must take its foot off the gas pedal when it comes to spending, and return to budgetary balance as soon as possible,” adds Miguel Ouellette, Director of Operations and Economist at the MEI.
Housing shortage: An enduring problem
In its budget, the current federal government plans to spend over $4 billion on affordable housing. While the intention may be noble, this measure risks leaving the root of the problem unaddressed.
“You don’t resolve a structural problem by throwing money at it. Right now, there’s a shortage of housing in many cities in Canada, and even in rural areas. Building a few thousand affordable units will not make this shortage go away. The different levels of government should instead stop artificially stimulating the demand for housing, and aim to eliminate the obstacles that are standing in the way of real estate developers. It’s by increasing the private sector supply that we will ease the shortage,” points out Mr. Ouellette.
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The Montreal Economic Institute is an independent public policy think tank. Through its publications, media appearances, and advisory services to policy-makers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.
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Josée Morissette, Senior Advisor, Media Relations