Wednesday, November 18, 2015

On Prudent Spending

Now that the former fiscal masters of the universe, a.k.a. the Harper government, has left us with a structural deficit that will mean $3 billion to $5 billion in each of the next five years, the usual ideologues are suggesting that Justin Trudeau needs to reign in his deficit-spending plan. Financial probity is nothing to be lightly dismissed, but The Star's Carol Goar has some suggestions on how that deficit can be made more manageable:
... clean up the tax credits, deductions, exemptions and deferrals (known collectively as “tax expenditures”) that cost Ottawa billions of dollars. The Conservatives brought in at least 70 of them. But past Liberal governments created them, too.

These hidden expenditures cost approximately $150 billion a year in foregone revenue.

A second alternative is to stop spending money on Conservative priorities. The Liberals were never in favour of jailing young offenders for drug possession and other non-violent crimes; detaining unsuccessful refugee claimants; building mega prisons; auditing charities whose leaders spoke out against government policies; buying top-of-the-line stealth fighter jets; or airing prime-time government ads.

A third choice is to terminate, or substantially scale back, corporate subsidies. Right now, there is a request for $1 billion from Bombardier sitting on the prime minister’s desk. Chrysler came calling last year. Over the last half century, Industry Canada has disbursed $22 billion to businesses ranging from oilsands developers to ice cream parlours, high tech manufacturers to pizzerias. The assumption is that these handouts boost growth and create jobs, but no government has provided credible evidence to back up this proposition.

The cupboards need not be bare as long as ideology no longer trumps strategic expenditures that will benefit the many instead of the favoured few so slavishly courted by the former regime.


  1. Lorne, corporate welfare is a serious problem. Helping general public is just a political slogan to get elected. I hope Trudeau will put an end to corporate welfare. So for it looks good but time will tell how Trudeau will tackle these problems.

    1. If Trudeau bears in mind that the purpose of government is to serve the people, not the corporations, LD, he will make some good decisions, but I agree that time will tell.