Canadians are demanding a Budget Balancing Plan
Nearly 74% of Canadian small businesses express concern over the federal government’s lack of a concrete plan to balance the budget, as deficits and federal debt continue to rise, reports the Canadian Federation of Independent Business (CFIB). These sentiments are also held by many growers across the country.
The federal debt has almost doubled in the last decade, increasing from $602.4 billion in 2012/2013 to $1.173 trillion by the end of the 2022/2023 fiscal year.
“The federal government must introduce a timeline to balance the budget. Our economy and our entrepreneurs cannot sustain this level of debt forever. Too much money is spent to manage our debt. That’s money that could instead be used to reduce taxes and the cost of doing business,” said Jasmin Guenette, Vice-President of National Affairs at CFIB. “Ottawa needs to stop acting as if it has money to burn and, instead, work to avoid driving up the national debt.”
Currently, the entirety of Canada’s annual goods and services tax (GST) revenue scarcely covers the $54 billion spent on interest payments alone.
This amount is comparable to the combined provincial budgets of Manitoba, Saskatchewan, and Newfoundland and Labrador for 2024/2025.
Projected figures suggest that by 2028/2029, debt servicing costs could reach $64.3 billion, equal to the combined elimination of the GST, energy taxes, import duties, and excise taxes for 2022/2023.
Guenette highlighted the drawbacks of tax increases, stating, “Increasing taxes is not a sustainable solution. It’s well beyond time for the government to get its fiscal house in order.” CFIB has proposed a number of strategies, including:
- Establishing a defined path for budget balance with clear indicators.
- Adopting a fiscal anchor that actively reduces both the deficit and the debt.
- Implementing legislative spending limits, excluding crises.
- Conducting internal reviews to reduce the size and cost of the federal public service.
- Freezing departmental operating budgets at current levels.
- Limiting new or expanded social programs.
- Selling select government assets like Crown corporations, land, and buildings.
“Farmers know that today’s deficits result in tomorrow’s new or higher taxes. Recurring deficits deter future entrepreneurs from entering the market and current ones from making the investments to grow their businesses. Canada must curb its spending tendency and implement solid fiscal anchors to help keep spending in check. The upcoming Fall Economic Statement and 2025 Budget is a great opportunity to start,” said Juliette Nicolaÿ, CFIB’s policy analyst and co-author of the analysis.
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