Successive fiscal updates from the federal Minister of Finance since 2019 show projected federal spending growing by leaps and bounds, even after COVID-related measures drop out of the projections. The government’s last pre-COVID projections, in its 2019 fall economic statement, showed federal spending of $421 billion in the 2024/25 fiscal year, the last year in the projections.
Ottawa produced no budget in 2020, an unprecedented failure, but the 2020 fall statement showed 2024/25 spending at $429 billion in 2024/25 – 2 percent higher than the 2019 projections. The 2021 fall statement showed spending at $465 billion in 2024/25 – 11 percent higher than in 2019. Meanwhile, the fall 2022 statement presented last month showed spending at $505 billion in 2024/25 – up 20 percent since the 2019 projection. Not because of COVID.
Everything else – transfers to every type of recipient, wages and pensions of federal employees, interest payments on the government’s ballooning debt – is up. About one-third of the higher amount now projected for 2024/25 is due to higher prices, but the federal government’s relentless spending is a key driver of inflation. Fiscal projections that turn out to be fiction are an insult. It should not take a recession or financial crisis to reveal that spending more on everything leads nowhere good.