Finance Minister Chrystia Freeland is scheduled to present a budget update Monday. From statements made in recent weeks by the minister and by Prime Minister Justin Trudeau, we know at least what will not be in this update: specific targets for deficit reduction and control of the size of the federal debt. This is a mistake that could cost Canadian taxpayers dearly.
Speaking to the Canadian Chamber of Commerce last month, Trudeau argued that it would be “premature” to state such goals while the COVID-19 pandemic continues to disturb and shatter thousands of lives in this country. Freeland promised “fiscal rules and limits,” but postponed fiscal guardrails and fiscal anchors.
As Robert Asselin, a former close adviser to Bill Morneau, recently pointed out, one of the purposes of setting deficit and debt targets — “fiscal anchors” — is to “provide a measure of fiscal discipline inside government. If the Finance Minister doesn’t have one, it becomes very difficult for her to put any sorts of constraints on her colleagues in Cabinet and caucus.”
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