Liberal debt goes from ‘fiscal anchors’ to ‘anchors away’

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While Prime Minister Mark Carny insists that the Liberal budget “on November 4 will adhere to the so-called“ fiscal anchors ”to guarantee that the financial policy of the government encourages long-term economic growth, the problem is that the liberals continue to move the target points to the“ fiscal anchor ”.

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This was the moment of the temporary parliamentary budget employee Jason Jacques, who should get a job for my money for forever, – when he said that after a decade of the liberal government the state of federal finance “shocking”, “alarming”, “stunning” and “unstable”.

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As an example of how the liberals moved to the target points when the then Minister of Finance Kristia Friland resigned in December, she accused the then Prime Minister Justin Trudeau of the fiscal anchor of liberals in the amount of 40.1 billion dollars. The United States for 2023 by 54%-in 61.9 billion dollars. USA.

In the era of Trudeau, the liberals promised two main fiscal anchors. Firstly, this annual deficiency will not be higher than 1% of the gross domestic product of Canada, and secondly, this is the ratio of debt to Canada GDP, a widely accepted measure of the country's economic health will decrease over time.

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Jacques predicted in his economic and financial prospects last week that the federal deficit as a percentage of GDP this year will be 2.2%, which is more than half the previous fiscal anchor of liberals of 1% and will remain significantly higher than 1% for the predictive future by 2% in 2026, 1.8% in 2027, 1.7% in 2028 and 1.6% in 2029 in 2029 in 2029 and 2030.

Worse, according to PBO, there will be a refusal of the liberals of their promise in the Trudeau era that the ratio of debt to GDP will decrease over time.

Instead, PBO predicts that the ratio of debt to GDP will grow in the foreseeable future, which is 42.5% this year, 43.3% in 2026, 43.6% in 2027 and 43.7% in 2028, 2029 and 2030.

Since the ratio of debt to GDP “is not predicted that it will not continue,” Jacques warned, this “causes fears about the long-term stability of the current fiscal policy”, which he called “very disturbing”, because “it is not stable mean that you do not have the opportunity to say:“ Maybe I will wait a couple of years and see how things go. ” This means that if you do not change … something will break. “

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“Looking at the rock” of the economic crisis

This true ratio of debt to the GDP of Canada was higher in the past.

For example, in the mid-1990s, he reached almost 70%, demanding that the then government of Jean Catiene contribute to a tough budget of rigid savings delivered by the Minister of Finance Paul Martin, which reduced transfers in the province.

The provinces loaded their loss of income for municipalities, and the consequences were felt when public services worsening throughout Canada, including healthcare.

Jacques said that although the Government of Karni has not yet “passed from the abyss … it looks at the rock” of the economic crisis if nothing changes in the future.

It is worth noting that the pre-pandemia of the liberals described the healthy ratio of debt to GDP as about 27%.

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In the light of this business council, Canada warned on Wednesday that Canada is faced with an “investment crisis”, which will increase the slow economic growth if the Karni government continues to take a greater debt to partially finance the so -called “national construction” projects without a plan to reduce expenses and debts over time

Carni promised to balance the budget after three years, but for this he makes an artificial difference between operating expenses for the management of government and capital expenses for the infrastructure, which he describes as “investments”.

The reality is such that, however, Carni describes this, all this will be funded by getting more debt.

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