The Canadian government is like a boat load of entitlements. Unless some cargo is cast off, the boat is going to sink. Unfortunately, the passengers are entirely unwilling to part with anything, and the captain won’t compel them.
Federal Canadian debt has been rising steadily for the past 55 years, apart from an eleven-year reprieve that started in the late 90’s. Prime Minister Carney has not stopped this doomed trajectory. In fact, the downward slide continues to gain momentum.
The federal deficit is expected to be $78.3 billion this fiscal year and remain above $55 billion for the four years following. Ottawa is taking out a loan of almost $1,900 in each of our names this year, with no plans to significantly slow down.
Each year’s losses add to Canada’s $1.45 trillion debt. Interest payments will cost Canadians $55.6 billion this year, far more than the $7.25 billion earmarked for defense spending. It’s hard to hold a gun when you’re carrying a big sack of money for your creditors.
At this rate, every new citizen and every newborn Canadian will pay interest on never-ending loans the rest of their lives. According to the MEI online debt clock, federal debt per Canadian equals $34,708.83. This more than doubles if you count the provinces.
People think they’re home free when they pay off their mortgages, but they’re wrong. Thanks to their governments, they are economic slaves for life. Unfortunately, they aren’t willing to pay the price of freedom if it means any less of their particular goodies.
Examples abound. The last time Canada Post made a profit before tax was 2017. Its cumulative losses have been $3.8 billion since then. A 32-day national strike in 2024 cost the company $208 million, driving annual losses to a record $841 million. Labour action for 2025 led to a one-third drop in parcel delivery, so the company suffered a $989 million loss before tax by the end of September.
Recently, CUPE and the federal government reached an agreement in principle, though details are not forthcoming. It will definitely include a healthy pay increase, but taxpayers can only hope that it includes a loss of defined-benefit pension plans. This perk, abandoned by private sector employers long ago for its unsustainability, lingers in parts of the public sector.
Most defined-benefit pensions pay two per cent times years worked, times 70 per cent of the average of the best five years of salary. If someone worked 35 years and made $100,000 annually at the end, they are paid $70,000 for life. Usually, these benefits are also indexed up for inflation. No investment plan can keep up with these pension demands. It is a Ponzi scheme borne by current employees and taxpayers, so people who were overpaid in their careers can keep living well when they aren’t doing anything.
Almost all of these retirees will get an Old Age Security check, even though they are already quite “secure” – more so than the average wage-earner. For the 2025 tax year, OAS won’t be clawed back until a senior’s net income exceeds $90,997, and won’t be cut off entirely until their income reaches $148,000. The government will spend $64.7 billion on OAS in 2025-26.
A stricter income test for OAS would easily shave multiple billions off of the annual deficit, but most seniors want to give that up. Many seniors are under the illusion that they paid into this system. The unfortunate reality is that it is paid for on the backs of working people, to be picked up later by any children they’re having. This won’t change easily. Seniors were the age group that put the Liberals back in power, so the government only wants to make them happier.
We could go on and on. Quebec wants equalization payments but doesn’t want the pipelines that would support the disproportionate payee (Alberta). The B.C. coastal Indigenous don’t want any pipelines underground or tankers on the horizon. But without a vibrant oil, gas, and export economy, doctors and nurses cannot get paid.
Canada lives in an unsustainable fantasy economy and the austerity of a balanced budget is the wake up call Canada needs. Unfortunately, no one has the sense to end the doomsday party. The Canadian ship is sinking and, unless something changes, people and their entitlements will go down with it.
