The Candice Malcolm Show - Nothing “modest” about Trudeau’s ongoing spending spree (Ft. Franco Terrazzano)

00:00:00.000 Canada is edging closer and closer to a fiscal cliff. Our debt levels will soon hit 1.2 trillion

00:00:05.660 dollars and our annual deficit remains above 50 billion dollars. But the legacy media is trying

00:00:10.820 to tell you that this is a restrained and even conservative budget. We'll cut through all the

00:00:15.300 spin and tell you the real story. I'm Candice Malcolm and this is The Candice Malcolm Show.

00:00:30.000 Hi everyone, thank you so much for tuning in. So as you saw, the budget, the federal budget was

00:00:35.200 released on Thursday afternoon by Justin Trudeau's finance minister, Chrystia Freeland. She took a

00:00:39.960 break from her major focus, which is the war in Ukraine, and decided to do her secondary job,

00:00:44.920 which is run the finances of Canada. She doesn't do a very good job about it. Well, we took the

00:00:48.980 weekend to read it through very carefully so we can report on all the hidden details that the Trudeau

00:00:54.120 government doesn't want you to know. So as you saw, Trudeau's faithful lackeys in the parliamentary

00:00:59.580 press gallery were hiding the ball and telling you that this was a budget that was modest,

00:01:04.860 restrained, prudent, and yes, even conservatives. They said that it focused on fiscal responsibility

00:01:11.060 and growing the economy. Of course, the opposite is true. The new deficit is now 52.8 billion dollars.

00:01:18.060 That's how much they're spending every single year, more than what they bring in. New spending in

00:01:22.720 this budget amounted to 56 billion dollars. Our debt is now 1.2 trillion, or will be at the end of the

00:01:29.340 year. That means that each individual Canadian, including yourself, owes $31,000 of that debt.

00:01:36.160 Your children owe $31,000 of that debt. The debt is growing $400 million per day, according to our

00:01:43.380 friends over at the Canadian Taxpayers Federation. And so to help really break this down, we wanted to

00:01:49.480 bring in our friend from the Canadian Taxpayers Federation, Franco Teresano. Franco is the federal

00:01:55.760 director of CTF. He has a master's degree in public policy and a bachelor in arts and economics.

00:02:01.480 Franco writes about the costs associated with tax increases, inefficient government,

00:02:05.320 unintended consequences of government policies. Franco, it's great to see you. Thank you so much

00:02:09.780 for joining us. Hey, well, thanks so much for having me on today. So tell us about this budget.

00:02:16.580 We've had a couple of days here to digest it and to see how the media is covering it. I want to get your

00:02:22.260 thoughts, though. What does the budget mean? What are the day-to-day impacts of it?

00:02:26.500 Well, we're seeing another credit card budget from this credit card government. And just like all huge

00:02:32.160 credit card tabs, it's really going to come with a sting for taxpayers already, but also down the road.

00:02:37.900 As you mentioned, another huge deficit, right? The third year in a row with massive deficits. Back in

00:02:43.880 2020, the deficit was over $300 billion. Last year, over $100 billion. This year, still over $50 billion.

00:02:50.860 And of course, with all of that borrowing for years and years and years, it means taxpayers are

00:02:56.380 losing out on a ton of money just to pay interest on the debt. Candace, this is a number that really

00:03:01.620 stuck out to me. Every single month, taxpayers are losing out on more than $2 billion just to pay

00:03:09.840 interest charges on the government's credit card. To put that into more perspective, it means that this

00:03:14.900 year, Canadian taxpayers are paying more just on interest charges on the federal debt than the Alberta

00:03:20.520 government is spending on health care. That's wild. That's incredible. And no wonder our

00:03:26.900 health care system is lagging behind. No wonder our country isn't getting ahead. It's interesting

00:03:31.340 because when you listen to the liberals and Chrystia Freeland, one of the things I saw her say

00:03:36.780 in an interview with Global was that her focus is on growing the economy. Okay. So that's the key

00:03:43.820 focus for Chrystia Freeland in this budget. Well, Rudyard Griffith, who is an editor over at The Hub,

00:03:50.300 he put out a graph from the budget that shows that Canada is dead last in per capita GDP growth for the

00:03:58.660 coming decades. It shows less than 1% growth in our GDP, which is way below the OECD average.

00:04:04.680 And yet, at the same time, our government spending is growing by about 2%

00:04:09.260 per year. Is there anything in this budget that you see is actually helpful to growing the economy?

00:04:15.980 Or how can the government justify it in this way?

00:04:19.740 There is very little in there that taxpayers should be happy about in terms of some economic

00:04:26.020 growth. There's a little bit of tax relief for medium-sized businesses by expanding the eligibility

00:04:31.220 to the small business tax rate, which is lower than the corporate tax rate. But there really isn't

00:04:35.800 much in here. In fact, it's the opposite. It looks like this budget is going to continue to fuel

00:04:41.260 inflation. And Candace, the higher cost of living is one of the key issues facing Canadians in our

00:04:48.400 day-to-day lives. You know, this government likes to talk about affordability, but so many Canadians

00:04:54.740 can't afford to fuel up their cars with gasoline or put ground beef in their shopping carts at the

00:05:00.620 grocery store. And one of the reasons is because this government is spending like crazy, and it's

00:05:06.080 raising taxes. Well, what we're seeing is more debt in this budget. Over the next few years, this budget

00:05:12.580 is going to increase the federal government's $1.2 trillion debt by about $150 billion. We hear the

00:05:21.620 government say they want to reduce the cost of living. Well, trying to fight inflation with all this

00:05:27.400 government debt is like trying to put out a fire with a can of gasoline. It's just going to make

00:05:31.660 these things worse, right? Now, let's talk about the tax hikes that we have seen already. We've

00:05:37.900 already seen the carbon tax go up in 2022. We've already seen booze taxes go up in 2022. We've already

00:05:44.340 seen payroll taxes go up in 2022. In this budget, there's going to be a tax on banking and insurance

00:05:51.800 companies. And look, you're not going to see me losing any sleep over big bankers. But what I am

00:05:58.260 going to lose sleep over what I am worried about is that those costs are going to trickle their way

00:06:03.500 down into higher banking fees that Canadians are going to feel. Right, like the banks aren't just

00:06:09.720 going to eat the costs, they're going to pass it along to their consumers to their clients, and Canadians

00:06:14.640 are going to end up paying more for their banking. That's, that's, that's kind of the basic, you know,

00:06:19.680 equation that the people in this government don't really seem to understand. I want to talk a little

00:06:24.200 bit about inflation, because I noticed that the inflation numbers were worse than what the

00:06:29.280 government's own targets were last year. So, so this is obviously a problem that they didn't foresee

00:06:33.960 in the way that that it has actualized. I like your line there about how, you know, trying to ease

00:06:41.380 inflation with more government debt is like putting out a fire with gasoline. So I, you know, the government

00:06:47.140 shrugs it off and just says, this is a global phenomenon, it's not their fault. We are seeing

00:06:51.200 inflation in the United States, who is also in the midst of a spending spree for COVID. I want to ask

00:06:58.340 you, you know, why is inflation growing? And what does it mean for the typical Canadian?

00:07:04.840 Well, it means a lot of hardships is what it means for Canadians. And this is real Canadians who are in

00:07:10.000 the private sector who may have lost their job during the pandemic, who may have taken a pay cut during

00:07:14.380 the pandemic, who may have lost their business. They're feeling the pain of higher prices at the

00:07:18.980 worst possible time. Yeah, it might not feel too painful for the people who are living in their

00:07:23.520 cushy bubbles in Ottawa, who continue to give themselves pay raise after pay raise after pay

00:07:28.260 raise. But for everyday working Canadians in the private sector, it means an awful lot of pain.

00:07:35.060 Now, let's talk about some of these global confusions, if we can call it that. Yeah, other countries are

00:07:41.540 feeling the pain of inflation when these other countries are running massive deficits and have

00:07:46.220 their printing press on overdrive like Canada. But countries that haven't had all this money

00:07:51.380 creation, Japan, Switzerland, aren't dealing with the type of inflation that's happening in Canada.

00:07:57.060 And Candace, I want to address another point of confusion that we often hear is about these

00:08:02.980 supply issues. Well, we always have supply issues. There is always supply issues year after year,

00:08:09.860 whether it's a refinery shutting down, whether it's maybe bad weather, crop disasters. This happens

00:08:16.480 all the time. Yeah, CP strike that happened a couple of years ago caused huge supply issues. So you're

00:08:22.960 right, we see it every year. Exactly. But what's different about now that's leading to 30 decades

00:08:28.940 high inflation? What's different about now is that we just had two years of revolving government

00:08:35.020 lockdowns, which hammers output, we just had the printing press create $370 billion out of thin air,

00:08:43.360 drop it into our economy, meaning the more dollars they print, the less that our dollars buy. So what

00:08:48.820 we've seen now, which is different than before, is the government create the perfect storm for inflation,

00:08:53.960 which is too many dollars chasing too few goods.

00:08:56.680 And then they kind of throw their hands up and just say it's a global phenomenon. It doesn't have anything to do

00:09:02.420 with what we are doing. It's like we're relearning all of the same lessons that we I thought we had learned in the

00:09:08.000 70s and 80s when we were dealing with inflation back then. So what would your advice be to the government to

00:09:13.220 curb this problem? Because you're right, it has such a big impact on Canadians' everyday life, the price that you pay at the

00:09:19.020 grocery store, the cost of gassing up, filling up your car with gas, the cost of buying anything, all of these supply

00:09:25.060 issues. So what would you advise the government do instead?

00:09:30.280 Stop doing what you're doing to make these tough times tougher. Turn off the printing press, right?

00:09:36.300 Stop with these massive inflationary government deficits and crazy overspending. And number three,

00:09:43.460 stop with the tax hikes at the worst possible time. It sounds common sense because it should be common

00:09:49.920 sense. If you're creating inflation with your crazy spending, with your printing press and with tax hikes, stop doing

00:09:57.820 it. So that's what we're calling on the government. And it's what we have been calling on the government to do for quite

00:10:02.880 some time.

00:10:04.400 Well, I do want to go through some of the way that the media has described this. So Global News Bureau Chief David Aiken

00:10:11.060 tweeted out that this is a very modest budget. Budget measures have a net cost this year of $7.4 billion.

00:10:17.960 Net new spending through fiscal 27 is just $30 billion. Well, that's a little different than the numbers that we have.

00:10:24.040 I calculated the new spending to be $56 billion. Alas, John Iveson in the National Post wrote that for these big

00:10:31.620 spending liberals, this is what a prudent budget looks like. Likewise, Tata McCharles of the Toronto Star tweeted

00:10:38.020 that this may be the most conservative budget that true to liberals have written yet. I saw

00:10:43.580 Mercedes Stevenson repeat this line on a news report. She said that the government is sending a message of

00:10:49.680 fiscal restraint. And she told us that Canada is returning to pre-pandemic spending levels. I just

00:10:56.960 want to give you an opportunity, Franco, to reply and to refute any of these messages. Is this an accurate

00:11:02.860 picture of what the budget looked like?

00:11:04.360 No, no, not at all. I mean, in what world is this budget prudent or some type of fiscal

00:11:11.320 responsible? Not on planet Earth, maybe on some type of fantasy land. And here's why. So pre-pandemic,

00:11:18.340 the federal government was spending all-time highs. Just let that sink in. We'll get back to it.

00:11:22.960 Now, this year, the government is going to be spending about $90 billion more than pre-pandemic,

00:11:30.420 which was already all-time high. So back in 2018, 2019, you had the Trudeau government spending more

00:11:37.020 than the federal government did during any single year during World War II, even after accounting for

00:11:42.340 inflation and population differences. And this year, the government wants to spend about $90 billion

00:11:48.280 more than that. So when you hear these numbers like, oh, it's just another $30 billion in new spending,

00:11:55.100 even it's just another $60 billion in new spending, even that undercuts just how big of a spending this

00:12:02.740 budget truly is. $90 billion more this year than what the government want was spending pre-pandemic,

00:12:09.640 which were all-time highs. But also, even if you just look at the last fiscal update, even if you

00:12:14.800 look at the last federal budget in 2021, this year's spending is going to outspend both those last

00:12:22.340 targets. So really, on all measures, this budget is chock full of more government spending,

00:12:28.560 more government borrowing. That's why we call it the credit card budget from this credit card

00:12:33.480 government, because there's also no plan to return to balance and no plan to start chipping away at

00:12:39.540 the $1 trillion debt problem. It's so interesting because, again, listening to our finance minister,

00:12:45.340 Chrystia Freeland, she said that the focus is on paying down the pandemic debt. She said that that

00:12:50.880 would be the government's fiscal anchor. She said the government's main fiscal indicator is a

00:12:55.780 declining debt-to-GDP ratio. We know that it was hovering at around 30% pre-pandemic. It's now

00:13:00.500 bumped up to 45%, which means that our debt is almost half the size of our entire economy, which is a

00:13:06.320 pretty terrifying figure, knowing that that doesn't even figure in provincial debt, which is also

00:13:11.620 astronomical. So when you add all those together, I don't even want to start calculating it,

00:13:17.580 because I predict or I assume that our debt is bigger than our economy. But again, how do,

00:13:26.060 well, maybe you can help us understand that, but break down those numbers. But how does Chrystia

00:13:30.140 Freeland, with a straight face, tell the Canadian public and tell the media that the government is

00:13:35.740 working to chip away pandemic debt? I didn't see any debt repayments in this budget. I just saw a large

00:13:41.240 interest payment, so maybe you can help us understand that. There is no debt reduction at all. Let's just

00:13:47.600 take that off the table. The debt is right now about $1.2 trillion, about $1.2 trillion. By the end of

00:13:54.920 this fiscal projection, which is 2027, the government will have added nearly $150 billion to the debt.

00:14:02.800 So there is absolutely no debt reduction in this budget, quite the opposite. More debt being layered on

00:14:08.680 top of Canadian taxpayers and their kids and their grandkids. And there's absolutely zero plan on when

00:14:14.800 this government is going to balance the budget. The best that this government is willing to do is to

00:14:18.920 say, hey, sometime in 2026, the deficit will finally be under $10 billion. We're going to finally bring

00:14:25.180 the deficit into single digit billions. But Candace, I mean, why should we even trust them on that?

00:14:31.820 Let's look at, let's look at the track record. Remember back in, what was it, 2014, you had Justin Trudeau

00:14:36.500 saying the budget was going to balance itself? Yeah, that didn't happen. In 2015, when he was

00:14:41.940 running for the office of prime minister, he said he would run a few modest deficits and balance the

00:14:47.620 budget in 2019. Well, it turns out he missed that target by a cool, easy breezy $20 billion.

00:14:54.620 So even the targets in this budget, which are not even close to balance, I think taxpayers have

00:15:01.880 every right to be skeptical of. Now, one point that I want to jump back to is this whole debt to GDP

00:15:08.480 ratio. This is the government's favorite, favorite fiscal anchor, so to speak. But still, to your point,

00:15:15.960 it is 15 percentage points above pre pandemic levels, which were already high. But it also doesn't

00:15:22.580 account for provincial government liabilities, which this government has shown that it's all too

00:15:27.360 willing to pick up the tab. Just last year, the feds gave Newfoundland and Labrador a $5.2 billion

00:15:32.940 bailout. So when you look at total indebtedness, our debt, our government debt is more than the entire

00:15:41.060 economy produces in a single year. It's over 100% of GDP. That's so terrifying. So I want to ask you,

00:15:48.960 because you mentioned Newfoundland and Labrador, I saw that the government approved a large

00:15:52.960 offshore oil and gas project, which gave me a little bit of a surprise. I didn't expect that

00:15:59.820 from the government. Apparently, drilling for oil out in the east is perfectly fine. Oil in

00:16:07.560 Western Canada, not okay. Were there any positive takeaways from this budget? Anything that you saw

00:16:12.780 that was a good sign for taxpayers? Well, I certainly had to dig pretty hard to find some nuggets

00:16:20.060 of good for taxpayers. But let me put as positive of a spin on this budget as I can for taxpayers. So

00:16:26.480 we kind of touched on it. There is some small and medium-sized business tax relief. They are expanding

00:16:32.840 the eligibility for businesses to be able to get that lower tax rate corporate. So yeah, I guess

00:16:40.520 that's some good news for some businesses that do need relief. So that's good. There's also going to be

00:16:48.620 some sort of tax-free savings account if you want to be a first-time home buyer. So you're going to

00:16:53.660 see a little bit of relief there. But there really isn't much good news for taxpayers. It really is a

00:17:00.380 lot of bad news, especially if you're already worried about the cost of living, which so many millions of

00:17:05.420 Canadians are, because you're going to have this debt continue to fuel inflation. Maybe you could say

00:17:12.920 that, well, the only major tax hike seems to be on these banks and insurance companies. But Candace,

00:17:17.660 as we've already talked about, well, who's going to end up really paying that tax? And it's likely

00:17:22.080 going to be Canadian consumers through higher banking fees. And of course, the real pain from

00:17:27.060 this budget comes from having to pay back these huge credit card bills that the Freeland and Trudeau

00:17:33.320 government is racking up. It's interesting. So you talked about that tax-free savings account for

00:17:38.220 first-time home buyers. I know that was a pledge that the Liberals had made during the 2021 election.

00:17:43.320 It was almost like a Conservative promise, because usually it's Conservatives who are trying to

00:17:46.440 incentivize personal savings. That doesn't really address, though, Franco, the larger issue,

00:17:52.100 which is the supply of houses. I mean, I think one of the biggest issues in Canada is just the cost

00:17:57.440 of buying a home. So many young Canadians, so many people under the age of 30, even under the age of 40,

00:18:02.440 are being blocked out of home ownership. And it really hurts people trying to go on to that next

00:18:08.440 stage of life, having a family, having kids, that sort of dream of living in the suburb,

00:18:12.820 not really available. So helping people who already have savings, who are already on the pathway

00:18:19.480 towards home ownership, doesn't do anything to address the astronomical cost of housing. I read that

00:18:26.320 the average single-family home in Ontario now is over $1.2 million. Imagine, you know, a 25-year-old

00:18:33.900 or a 30-year-old even trying to afford that kind of proposition. It seems impossible. And so the idea

00:18:41.280 of a tax-free account is really just, it's like window dressing. It doesn't do anything to impact

00:18:49.740 the root of the problem, which is that housing is so expensive, which is because there just isn't

00:18:53.540 enough housing in and around Toronto, but it's also a problem all over Canada. I know it's a huge

00:18:58.700 problem. Vancouver has been for decades, but increasingly a problem in places like Edmonton

00:19:03.280 and Calgary as well. So I guess, I wonder if you can comment on things that the government could do,

00:19:10.100 because another thing, Christy Freeland talked about how this was a supply-side budget, which is

00:19:14.080 kind of taking a page from Ronald Reagan, John F. Kennedy, the Conservatives, that they would focus

00:19:20.520 more on the supply-side economy. I didn't see anything that was actually supply-side. So again,

00:19:25.980 the government is saying things that aren't reflective reality. And when we look at the actual

00:19:32.220 situation, they're not addressing the supply-side. They're just kind of trying to help people save up

00:19:36.460 money, which again, increases demand because more people will be able to buy houses. So maybe you

00:19:43.060 comment on the confusion there. Well, you know, the housing issue is a huge issue and it's a complex

00:19:50.460 one. And just quite frankly, it's not just the federal government issue. You're also going to

00:19:55.040 have to look at provincial governments and also really municipal governments as well with regulations,

00:19:59.640 zonings, property taxes, things of that nature. But there's two things that governments as a whole

00:20:05.320 need to do in Canada. And one of the big ones is the federal government. Number one, stop the printing

00:20:12.100 press. Stop ballooning assets. That is what fuels and drives demand. Easy money policies that drive

00:20:20.080 interest rates low, fuel demand, pump new money into the system, balloon assets. So that is a big thing

00:20:26.880 that the federal government could just stop doing right away to stop ballooning these assets. But of

00:20:31.660 course, number two is, as you've mentioned, you have to build homes. And of course, you build homes

00:20:38.000 with hammers and nails, not with tax hikes. A thing that the CMHC, the Canada Housing or Mortgage

00:20:45.120 Housing Corporation, the Crown Corporation federally seems to totally not understand. Because Candace,

00:20:51.160 of course, the CMHC, which is a federal crown corporation, is taking our tax dollars to fund

00:20:57.580 report a report that recommends tax hikes to somehow cool off the housing market. Well, this must be the

00:21:05.140 first tax increase in history that is going to somehow reduce prices, right? Well, well, we've

00:21:09.860 done it. We've changed the law of economics. But of course, that's not how things happen in the real

00:21:14.440 world. And these types of home taxes that reports like this are recommending would just increase the

00:21:21.980 cost of homes, either with homeowners adding on to the price, the tax, or just deciding not to sell

00:21:28.720 and avoiding the tax, which again, would reduce supply. So Candace, as you talked about, governments,

00:21:34.860 not just the federal government have to encourage more homes to be built. And largely, that's just

00:21:40.500 getting out of the way. That's not spending more money driving up demand. It's getting out of the

00:21:45.620 way, cutting back on these crazy types of regulations. And number two, you got to turn off

00:21:50.560 the printing press, which is ballooning all types of assets, all types of prices, including home prices.

00:21:56.660 That's a really good point. One of the other things I noticed in this budget is it's chock full,

00:22:01.520 as you expect from a true budget, with woke pet causes. So there's lots of money to the sort of

00:22:06.780 rainbow rights coalition. There's something called menstrual equity in the budget. Yes, you heard that

00:22:13.260 correct, menstrual equity. Apparently, they're going to make women's menstruation equal to all people.

00:22:19.340 And as Tristan Hopper wrote about in the National Post, tax exempt sperm. We also heard Chrissy Freeland

00:22:26.180 sort of praising herself for women's liberation. She said it was a women's economic policy budget.

00:22:33.760 And she was patting herself on the back and applauding herself, saying that she had solved

00:22:39.120 the decades along a feminist issue of what, you know, balancing work and childcare for kids by

00:22:47.680 providing more government daycare, I guess. So I wonder if there were any of these woke pet causes

00:22:54.000 that that popped out to you, really useless spending or wasteful spending that you that you saw

00:22:59.240 on the budget. Well, there was two big ticket items that really caught my eye. Number one was what

00:23:05.040 they're calling this growth fund. Fifteen billion dollars in this fund. Fifteen billion dollars is a ton

00:23:11.240 of money for starters. But there wasn't very much details. Essentially, what it sounds like what it

00:23:16.360 smells like is this huge corporate welfare slush fund that they're going to be throwing around at this

00:23:21.780 business, that sector, that industry here and there. But look, this government couldn't balance

00:23:28.020 the budget of a lemonade stand. And now it somehow thinks that it can be an investment banker with 15

00:23:33.780 billion dollars worth of taxpayers money. Come on. I say no, thank you. Like just return the 15 billion

00:23:39.360 dollars to us through lower taxes and we'll take it from here. Let Canadian families and businesses grow

00:23:45.040 the economy. We don't need these bureaucrats running around. But the second thing that really caught my eye

00:23:50.160 was there's going to be a billion dollar government agency created to focus on

00:23:54.680 innovation. Well, Candace, have you ever heard a bigger oxymoron than that? A government agency

00:24:01.580 for innovation? Like, come on. It's crazy the things that they'll come up with to spend money

00:24:08.340 on. And your point, like, wouldn't you rather have investors and people who understand industry,

00:24:12.840 people who come from certain backgrounds that they can choose for themselves where to invest

00:24:18.280 and where to innovate instead of, to your point, having centralized bureaucrats in Ottawa? It doesn't

00:24:23.160 seem like there's a problem in the world that the Trudeau liberals don't think that they can solve

00:24:29.780 through more spending. Well, Franco, I really appreciate your time. Thank you for all your efforts

00:24:34.860 pouring through this budget so that we don't have to. Lots of lots of problems. And we applaud all the

00:24:41.440 efforts of the Canadian Taxpayers Federation. So thank you for joining us.

00:24:45.000 Well, hey, thank you so much for having me on today.

00:24:47.960 All right. That's Franco Teresino. I'm Candace Malcolm. And this is The Candace Malcolm Show.

The Candice Malcolm Show - April 11, 2022

Nothing “modest” about Trudeau’s ongoing spending spree (Ft. Franco Terrazzano)

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