Canada has a problem, throwing more money at it without real changes won’t help us: John Manley
Canada’s federal budget allocated billions of dollars in new spending measures to advance the growth of key industries, but according to a former deputy prime minister, it missed the critical commitment to balance the country’s budget.
The risks of mismanaging a budget could lead to massive cuts and economic pain in the future -- a calamity that John Manley, said he knows all too well.
During his time in government in the mid-90s, Manley, who also served as finance minister, explained he was forced to slash the federal budget in half as Canada lost the ability to borrow more money from the global market, resulting in 54 government programs cut down to nine.
“We no longer have a commitment to a balanced budget in the fiscal plan,” the senior advisor to Bennett Jones said.
Manley explained that this cannot always be the case as governments will at some point need to make necessary fiscal corrections.
“Keeping that overall fiscal situation in a manageable situation is key to it all, because at certain points, you do run out of your taxpayers’ money, and those days mean that you’ve got to reduce spending in ways that can be painful,” he added.
Manley pointed to the concern of money in this budget being spent on areas such as health care and the energy transition with no real growth strategy in place to ensure success. He also raised the issue of a slowing economy weighing on the government’s revenue projections, which could put them in a worse fiscal position than they are today.
“Anyone looking at those fiscal projections has got to say there’s downside risk there, there isn’t much upside risk,” he added.
In his view, it’s wiser to approach a budget by managing growth expenditures and revenue carefully, while building an economic growth strategy rather than simply a redistribution strategy, he added.
“Otherwise, there is a reckoning coming, and somebody’s going to have to face it,” he said.