The 2023 budget presented by the Newfoundlander and Labrador premier demonstrates clear fiscal prudence. In contrast, Trudeau’s budget spends $20 billion more this year than last. Pictured is Premier Andrew Furey. Photo credit: The Canadian Press/Andrew Vaughan
The premier and prime minister might be young Liberal pals with a lot of star power, but their governments’ 2023 budgets show that only one of them is looking out for taxpayers.
Premier Andrew Furey’s budget kept spending in check, offered taxpayers major relief and set Newfoundland and Labrador up for a balanced budget next year.
Meanwhile, Prime Minister Justin Trudeau opened the inflationary spending floodgates, raised taxes for Canadians and offered zero in terms of a pathway toward balanced budgets.
Furey’s budget demonstrated clear fiscal prudence. Government spending in Newfoundland and Labrador for the coming year is expected to be $363 million lower than what the government spent in 2022.
By contrast, Trudeau’s budget plans to spend $20 billion more this year than last year. The two governments’ approaches to deficit spending this year couldn’t be more different.
Furey and Trudeau also took very different paths on taxes.
Recognizing that Newfoundlanders and Labradorians were being hammered by high inflation and soaring living costs, the Furey government extended its seven cent per litre gas tax cut for another year, saving taxpayers $80 million. The typical two-car family filling up once a week stands to save $475 over the next year.
On the other hand, Trudeau is hiking taxes left, right and centre. Booze taxes are up. The carbon tax is up to 14 cents per litre and raising prices at the pumps, on home heating bills and on virtually everything else. Because everything we need is shipped from the point of production to the point of sale, higher carbon taxes will increase the cost of literally everything. Despite promising not to, the Trudeau government is fueling the inflation fire.
And Furey has a plan to get back to balance. Finance Minister Siobhan Coady expects Newfoundland and Labrador to return to surplus territory next year. She is forecasting a surplus of $297 million next year and $286 million the year after. For a province with just over half a million people, that surplus is truly impressive.
What’s more, the Furey government is planning to hold spending in check for the next five years. Base expenses are actually forecasted to decline by $50 million by 2028.
Trudeau’s borrowing plans couldn’t be more different. Finance Minister Chrystia Freeland is forecasting deficits as far as the eye can see. This year’s deficit will be $43 billion. That improves only marginally to $40 billion in 2024 and deficits are planned as far as the government has forecasted, to 2028.
Although Freeland promised in the fall to balance the books by 2027, her 2023 budget is now forecasting a deficit that year of $14 billion. Canada’s finances are getting worse, not better. And spending over the next five years is set to increase by $61 billion, while interest charges on the debt are set to soar to $50 billion per year by 2027.
Furey certainly has a lot to teach Trudeau when it comes to budgeting. Clearly, Newfoundland and Labrador has figured out that the budget doesn’t balance itself. Instead, the Furey government plans to curtail government spending to improve the province’s bottom line. On the other hand, Trudeau started a spending parade in 2015 and it’s still marching on.
And Furey recognizes that the solution to inflation relief is to lower costs for consumers, not to tax them more and promise rebates that only make up for a fraction of what they pay.
With federal debt and deficits spiraling out of control, it’s time for Trudeau to pick up the phone, call his pal Furey and get a crash course on how to craft a responsible budget.
Jay Goldberg is the Ontario Director at the Canadian Taxpayers Federation. He previously served as a policy fellow at the Munk School of Public Policy and Global Affairs. Jay holds a Ph.D. in Political Science from the University of Toronto.