Inflation rains billions on Ottawa

Inflation is raining billions on Ottawa

DAY

It's silly to say, but “thanks” to inflation, which has boosted nominal GDP, Justin Trudeau's government finds itself in a much better budgetary position compared to the forecasts made in March last by its Minister of Finance Chrystia Freeland during the tabling of its 2022-23 budget. 

Over the five fiscal years, from April 1, 2022 to March 31, 2027, the Trudeau government plans to raise $138.4 billion more than expected in personal and business income taxes.  

To this is added a tax supplement of $17.5 billion in taxes and excise duties.  

This means that the Minister of Finance, Chrystia Freeland, will come to take from our pockets during these five years some 156 billion dollars more than the tax revenues initially forecast last March.  

< p>When Minister Freeland boasts of helping certain groups of Canadian households more by improving a few financial assistance programs, let's say that she has the means.  

And that it is the least of the things it could do with the said additional $156 billion in tax revenue that it will collectively extract from us. 

To set the record straight… in Ottawa, the new financial assistance measures announced since the tabling of the federal budget last March total $44 billion for these five years.  

This includes $18.1 billion in “policy measures” taken between April and the end of October, and the $25.9 billion in new measures announced yesterday in the 2022 Fall Economic Statement.&nbsp ; 

Of course, this additional federal aid is timely in these difficult inflationary times when everything is much more expensive. But let's not lose sight of the fact that the Trudeau government will only return to the pockets of the less well-off households a portion of 28% of the 156 billion in additional taxes and duties that it plans to extract from us by the end. of the financial year 2026-27.  

Inflation is raining billions on Ottawa

Inflation rains billions on Ottawa

Lower deficit Federal

For all five fiscal years (2022-23 to 2026-27), Minister Freeland had planned, last March, to end these fiscal years with deficits totaling the sum of $147.5 billion.  

Yesterday, she gave us a much improved picture of the federal government's budgetary situation. For the five fiscal years in question, the Minister of Finance now projects that deficits will reach $110 billion, a reduction of $37 billion.  

Debt reduction

In its financial update yesterday, the Trudeau government presented us with an “improvement” in the federal debt. 

By the end of the 2026-27 fiscal year, net federal debt is expected to increase by $116.7 billion over five years. That's $30 billion less than the finance minister's budget forecast last March.  

But rising interest charges

It is now significantly more expensive to finance the huge federal debt. 

Interest charges on the federal debt have been revised upwards due of course to the strong rise in interest rates following the Bank of Canada's series of policy rate increases. 

Thus, the bill for said federal debt interest charges for the five fiscal years (2022-23 to 2026-27) will be $167.7 billion, $12 billion more than the bill projected in the budget tabled in March. 

Inflation is raining billions on Ottawa