00:26:03.600I mean, ultimately, you know, we still do have some COVID-related spending, some emergency spending that's going on in 2021.
00:26:10.080But we actually do in our analysis, we also look at 2022, which is expected to be a little bit more normal than 2021.
00:26:17.400And while per-person spending will actually decrease a little bit in 2022, it'll still be, again, significantly above what we saw before COVID.
00:26:24.940So we're expecting per-person spending at the federal level to be about 12% to 18% above what we saw in 2019, which was the last year before the pandemic.
00:26:34.180And again, 2019 was already at record levels in Canadian history.
00:26:38.120So if we even just look at 2022, I think that's probably a good barometer of where we're headed in the future as well.
00:26:44.940Now, are we adjusting for inflation with these numbers?
00:27:27.700So really what we saw, you know, beginning in the 2009 recession was a big spike in per person spending across Canada.
00:27:34.060And then there was a slight decline following that recession for about five or six years.
00:27:38.360I mean, really, we saw the spending starting to ramp up again in about 2015, 2016, as the new government started to implement new programs, expand, you know, programs as well.
00:27:49.920And really what we saw between about 2015 and 2018 or 2019 or so, we really saw per person spending increase by about $1,000.
00:27:58.620So on an individual basis, you know, the federal government was spending more than $1,000 per person, in addition to what they had already spent before that.
00:28:06.300So we saw that start to climb up above about $9,300 a person.
00:28:11.040So, you know, obviously this had to do with new programs, but also expansions to old programs as well, like the Canada Child Benefit and a number of other programs.
00:28:18.180And now what we're seeing, you know, after COVID, you know, talking about introducing new programs as well, like national child care, national pharma care, and a number of other programs as well that are only going to compound these costs as well for Canadians.
00:28:32.720I know you look at the spending specifically in terms of the cost and not necessarily delving into the detail of the individual programs.
00:28:40.580But as a taxpayer, I'd look at this number and say, am I getting, you know, 15, 16, 17% more from the government?
00:28:46.780Am I getting that much more for being a Canadian taxpayer?
00:28:49.840And I think for a lot of people, the answer would be no.
00:28:52.660Well, it's certainly, you know, a question for all Canadians to kind of answer too, you know, looking at the tax rates that you pay relative to, you know, kind of the bang for the buck that you get for all these various services.
00:29:02.000And also understanding the different cost implications.
00:29:04.840If we have, you know, deficits that we're running because of all this spending,
00:29:08.040really what we're doing is implementing higher tax rates in the future to pay for today's spending.
00:29:12.920At the same time, we're going to face, you know, debt interest costs at the same time in the future, particularly when interest rates are rising.
00:29:19.300So there are costs and trade-offs to every decision that they make in Ottawa.
00:29:22.900So it's certainly something important for all Canadians to be informed of.
00:29:26.920Now, I know you looked at election spending as well, or specifically election promises.
00:29:31.600And that is going to, as I understand it, push this even higher.
00:29:36.580So before the election, 2021 per person spending was going to be about $12,700.
00:29:43.140But based on campaign promises by the Liberals, that would actually take you to over $13,000 per person.
00:29:50.120And, you know, obviously they're in a minority government situation, so they're going to have to work with opposition parties in order to pass budget bills and survive as a government.
00:29:57.780So we also looked at, you know, one of their likely partners in governing at the NDP's platform.
00:30:03.260And that would, if they were to implement all of the promises in that platform, it would take you to almost $14,000 at about $13,700.
00:30:10.860So it's certainly a significant increase in spending, and we're likely to see, you know, that per-person spending range somewhere between that $13,000 and $13,700 per person.
00:30:20.960So that's certainly a significant increase, maybe about, you know, over 50% higher than what we saw during the 2009 recession.
00:30:28.520And we also know, just from looking at other reports, including the Parliamentary Budget Office's assessments, that we could be on track to run up deficits.
00:30:37.880I think the one scary statistic was until 2070.
00:30:40.880And I know that a lot of this is all interconnected.
00:30:43.500The more that's being spent to maintain and pay for debt, to service the debt, all of that, the more money that is coming from tax revenue to do that,
00:30:51.620which means the less that is available for services, thus more taxes.
00:30:54.740I mean, all of these things are very much interconnected when Canadians are, by and large, paying more.
00:31:00.600You get into that vicious cycle of deficits and debt over time.
00:31:04.060And at the same time, you know, not only do we have federal challenges, we also have provincial challenges as well.
00:31:09.740We have an aging population in Canada, a rising health care costs.
00:31:13.460So, you know, provinces are asking for more money from the federal government right now.
00:31:17.100So significant challenges really all across governments in Canada.
00:31:20.980You know, we're seeing spending really rise all across the country at, you know, the local, provincial and federal level.
00:31:27.260So there's going to certainly be big challenges coming out of COVID for all governments.
00:31:32.300What do you think it says that we're spending just monumentally more than even in the midst of the war,
00:31:37.540which is often held up as, you know, the gold standard for when spending is just going to be so wildly out of check?
00:31:42.640Yeah, well, that's something that we found was especially interesting in our analysis, too.
00:31:47.480Even just looking at 2018 and 2019 before COVID, so really before any crisis period as well, you know,
00:31:54.600we are spending far more than we were during the 2009 recession and before World War and what we were spending at the peak of World War II as well.
00:32:03.280So really during the good times during 2018 and 2019, you know, we were spending higher than what we were during the crisis levels.
00:32:10.080So this has kind of had a compounding effect if you're already spending more than you were during crisis periods,
00:32:15.160during the good times, when bad times come around, then that only, you know, spiral out of control even more.
00:32:20.960And then when you're setting that new normal in 2022 and beyond, what you're going to see is, you know,
00:32:25.960spending again rising and rising and rising further beyond what we were, you know, during 2009 or during the Second World War.
00:32:33.460So it's certainly concerning in that aspect for sure.
00:32:35.680To look a bit more forward instead of backward here, I mean, is this a fiscal death sentence or is it possible to start pushing these figures in the right direction?
00:32:44.500Because I know that we have seen, if you look at the chart and there's a good infographic that accompanied your report,
00:32:50.040what we have seen decline notably in the 80s and 90s towards the 2000s, but we're also dealing with such higher numbers now.
00:32:57.560So is it possible to start pushing back the other way?
00:33:00.100Well, certainly, you know, I would reference the 1990s, for example.
00:33:03.700I mean, we're not at the near fiscal crisis that we saw during the 90s.
00:33:07.580But, you know, as things kind of get out of control, then you can get into a situation like the 1990s again.
00:33:13.840But they made a lot of decisions during the 90s, you know, spending reviews.
00:33:25.220So it was a significant change that they had to make, but obviously they had to make difficult decisions because they had high interest costs.
00:33:33.680And debt interest costs essentially took up about one in every three dollars of revenue at that point.
00:33:38.940Obviously, we're nowhere near that right now.
00:33:41.440But certainly, you know, you can get to a point in the future where you have to make these difficult decisions.
00:33:46.460So the longer you put off these decisions, you know, the harder and harder it gets to return to budget balance and to prudent finances.
00:33:53.780Now, I have to say something just on a technical note here.
00:33:57.780I know you've broken it down in chunks here by, you know, notable events, but also terms of government.
00:34:04.660And I'm guessing that's very deliberate to look at it that way rather than just individual years.
00:34:10.440We wanted to show, you know, we're kind of ranking prime ministers kind of on the amount of spending over their terms as well.
00:34:16.440We obviously want to correct, you know, certain prime ministers had recessions while others didn't.
00:34:20.680So we want to account for all those different factors.
00:34:22.860You know, but what we really see, you know, in the ranking of prime ministers, for example, is that Justin Trudeau ranks the highest on the increase in per person spending since the Second World War at about 11.7 to 12.4 percent, depending on the figure in 2021.
00:34:40.520So there's significant increases in per person spending.
00:34:43.880And, you know, Trudeau also ranked fairly high even before COVID as well on that list.
00:34:51.480I mean, lest anyone blame the pandemic, we were already at a record high in 2016 to 2020, outpacing the previous record of 2009, which was when the recession was.
00:35:00.820So I wouldn't let anyone use that as a kind of an escape hatch for accountability on this.
00:35:05.380Yeah, well, one of the interesting things that we found in our analysis is, you know, Justin Trudeau is actually on track to record the five highest years of spending in Canadian history based on 2018 to 2022.
00:35:18.400So if the spending plans that they laid out in the election come to fruition, we'd actually see, you know, not only before the pandemic and after the pandemic, you know, we'd see those highest years in Canadian history for spending, which is certainly concerning there.
00:35:31.820Well, that's one way to put yourself on top in the history books.
00:35:35.740Jake Fuss, Senior Economist with the Fraser Institute, the report in question you can catch by looking at Prime Ministers and Government Spending, the updated 2021 edition, so brand new.