Federal budget could be better
I want to start this column by acknowledging the tragic passing of one of my Conservative colleagues, Medicine Hat-Cardston-Warner MP Jim Hillyer. Jim was an active presence in the last Parliament and will be missed by his colleagues from all side of the House. On Wednesday of this week, MPs cancelled the usual House of Commons proceedings, and instead used the time for a series of moving tributes to a great public servant.
The new federal government just released its budget — a document which sets the direction for the government’s tax and spending agenda, over the next year, but also over the course of its mandate.
At a macro-level, I think this budget represents a wrong turn for Canada. The new government seems to believe that higher taxes, and even higher spending, will stimulate stronger economic growth. While increasing government spending, the new budget sets the small business tax rate at 10.5 per cent, not the previously-promised nine per cent. It also eliminates the hiring credit for small businesses. These changes make it harder for small businesses to start, grow, and create jobs.
Economic growth is generally stimulated most effectively by encouraging economic activity in the private sector. Governments are important and provide vital public services, but they do not create wealth – at least, not as effectively as the private sector.
This government’s approach is wrong-headed. Rather than stimulating growth in the private sector, they are making private-sector wealth creation more difficult through higher taxes and the elimination of the hiring credit. They believe that we can create jobs and wealth through a significant increase in deficit and debt. Though Canada is not in a recession, the government will be running $30 billion deficit this year and will continue to run deficits for the foreseeable future. The government claims that these deficits will lead to economic growth.
When it comes to the deficits=growth proposition, the proof will be in the pudding, but I am quite skeptical. Over the last 10 years, Canada has had the best economic growth record in the G7, while also maintaining the lowest debt-to-GDP ratio in the G7. In other words, we’ve had some of the lowest deficits and debt, associated with the highest economic growth. That would seem to demonstrate the point that growing the government is not the best way to grow the economy.
In addition to being wrong for the Canadian economy, this budget is not what Canadians were promised during the election. Although the Liberals did promise deficits, they promised $10 billion per year for three years, and then a balanced budget. Instead, the government has burned through the entire $30 billion deficit allotment in one year. This is the wrong approach, and I will continue to fight for the restoration of some basic fiscal common sense.
You can view the full budget at www.budget.gc.ca.
Garnett Genuis is the member of Parliament for Sherwood Park-Fort Saskatchewan. He can be contacted by e-mail at email@example.com or by phone at 780-467-4944. His office is located in the Park Place Professional Centre, Unit No. 214. Genuis was first elected in October 2015.
Published: Thursday, March 24, 2016