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When considering who your candidate is, the biggest ballot question for Monday should be focused on what the long term implications of electing them will be. Yes, Trump is definitely a significant issue, but I do not believe that he is “the biggest crisis of our time” as Mr. Carney has stated. In my recent lifetime the lockdowns associated with the COVID-19 pandemic were materially bigger. Yes, Trump threatens our steel, aluminum and automobiles, but during the lockdown there was NO market for those. Yes, the environment is a focus point. However, for those of you who think that Alberta would take the approach of “burn baby burn”, you obviously don’t work, live or raise a family here. We genuinely care, because first and foremost our family is here. Some of the most environmentally focused people I have had the pleasure of meeting also happen to run the energy companies that people so easily blaspheme. No, in my opinion, the number one issue that people should be considering as they vote is the financial position of our country. The way that governments pay for the increasing interest bills and debt principal is through taxes. So, when parties have proposed adding 100’s of billions of dollars to the debt balance, there only way to pay that bill without increasing taxes is by a commensurate expansion in the economy, but if you look at the recent forecast by TD Bank, they are looking at lethargic growth of just 1-2%/year over the balance of this decade.
Meanwhile, if you visit the Canadian Taxpayer Federation, the debt clock keeps spiraling higher, with the current estimate at approximately $1.258 trillion. The problem is that either party, be it the Conservatives or Liberals, will compound the growth in this debt, quickly. Poke holes as you will at their forecasts, the truth remains that there are a number of tenets in both which should cause pause to all. As an example, both are forecasting ~$20 billion in tariff revenue in year 1. Remember who pays that tariff? You do. So really, any deficit forecast that is being presented should really incorporate that number into the impacts on everyday Canadians.
But here is the real crux of the issue. Taxes. Parties can promise cuts and can show you the yellow brick road that is ahead of you, but at as the saying goes, the only thing you can guarantee in life is death and taxes. When the economy is expected to grow by ~7% over the next four years while the debt is expected to grow between 8%(Conservative) to 18%(Liberal) over that same timeframe, you see where we start to have a problem. As I outlined in my piece Tax (and Likely Voting) Insights, we have a big problem in Canada, and it is a big driver in terms of how politicians likely look at the electorate. In the charts below, I put in the Federal tax data from Statistics Canada for 2023. In short, 64% of Canadians pay just 10% of the personal federal taxes collected, and that amounts to a paltry $1,036/person. Meanwhile, roughly 2% of the population paid 28% of the taxes collected and their average federal tax bill was $125,950.
At the end of the day we need to create more taxpayers with better jobs (and thus more tax revenue). Moreover, we need to cut waste. You can shrill all you want about the need to spend more on Federal programs etc., but the reality is that we have gotten lazy and we just expect more, without focusing on how we are going to pay for it. Don’t say “tax the rich” because a) they already pay a lot and b) they can, and will, move…because they can. All we are doing is putting off the inevitable, because, frankly, most people don’t actually pay for the “free stuff” they already get. By delaying the inevitable, the future only will be more brutal, because those who hold our debt will demand it. So, with all that in mind, remember that the nice to haves cannot be had without having the financial platform from which to fund it. I personally am voting Conservative. Though I do see flaws in their platform, I do think they have a vision to how to make things better. The Liberals have demonstrably shown that they have been reckless with finances, and the core of the entity remains the same (perhaps reinforced as Butts is back), and they deserve a timeout for their poor behaviour.
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