True Patriot Love

00:00:00.000 Today at True Patriot Love, we're spinning the wheel of deficits, joined by Franco Terzano to see what the government might cut.

00:00:08.440 But will they really? As the fourth quarter rolls in and the pressure keeps building, the question looms.

00:00:14.440 Are we staring down the biggest budget deficit in Canadian history and possibly at the worst time?

00:00:20.860 Because timing and politics is everything. One wrong move, one bad call.

00:00:24.960 This could be the straw that breaks the camel's back. And could this send us spiraling towards economic trouble or even a non-confident selection?

00:00:33.900 Watch, learn and stay tuned, because right now, this turning point in Canadian history is on us, the people, to pay attention, to understand, to see where the wheel lands next.

00:00:54.960 Hello, everyone. Today, I am lucky enough to have Franco Terzano from the Canadian Taxpayers Federation with us.

00:01:08.900 And we're going to talk about the PBO and our upcoming November 4th budget.

00:01:15.500 So, Franco, welcome and give us some thoughts on what's about to happen.

00:01:20.700 Well, hey, thanks for having me on. It's my pleasure. I mean, look, I'm very, very worried about the finances of our country, right?

00:01:29.540 The debt is absolutely out of control. Interest charges are blowing more than a billion dollar hole in the budget every single week.

00:01:36.920 So I think the biggest thing that I'm concerned about, and we can get to this in a bit, is that you're hearing a lot of noise from the Kearney government, right?

00:01:44.820 A lot of complexity, trying to muddy the waters about splitting the budget.

00:01:49.480 Folks, we have to cut through that noise, cut through that spin, and we've got to look at the one number that truly matters in this year's budget, and that's how fast is the debt going up.

00:02:00.460 Yeah, Franco, you know what? I want you to, I'm going to put a clip on.

00:02:03.720 So, Nick, throw this clip up, which is very interesting, you know, and I'm glad you hit on it right away.

00:02:08.480 The speak of the parliamentary budget officer, you know, very interesting the way he goes at it.

00:02:16.680 So let's take a look and pop it up for a minute. Let's watch a few seconds.

00:02:21.400 Warning. We project the budgetary deficit will be $68.5 billion. That's billion with a B.

00:02:29.640 We project the federal debt-to-GDP ratio will be 42.5% of GDP this year.

00:02:34.840 How alarming is that for the average Canadian, for the taxpayer? Because there is only one taxpayer, right?

00:02:39.920 Stupefying. Shocking. Right? This is not, like, it's not a, it's not, it's not a, it's not a funny fiscal outlook.

00:02:50.660 It's, it's a really serious fiscal outlook.

00:02:53.840 Are we closer to where we were in the mid-90s than we were 10 years ago?

00:02:58.980 The, the numbers in the mid-90s were far more alarming.

00:03:01.700 If we don't change things, we're going to end up there again.

00:03:06.000 When do you project the budget?

00:03:08.780 So, Franco, here's the interesting thing, right?

00:03:11.660 So this Jason Jock, the, the new, uh, parliamentary budget officer, I'm going to call him PBO for those, uh, as an acronym.

00:03:19.240 But, you know, he, he's in, on an interim basis, he's put in, by the government, and, and he gets up and, and he gives us these interesting sound bites.

00:03:27.960 I find it, I kind of, the messaging interesting on this one, you know, it's shocking, stupefying, you know, it's continuing at $60 billion.

00:03:35.600 And so, you know, I put together, Nick, throw the, throw the PowerPoint, not, not the wheel, the PowerPoint up.

00:03:41.100 But, uh, you know, it's interesting that, you know, uh, we did a show earlier and we talked about revenues and expenses of this government.

00:03:50.640 Right. And so in 2024, we had a $61 billion budget, uh, deficit, um, and we have only so many ways that we can either make revenue, uh, or generate revenue in this government.

00:04:04.860 So whether it be personal tax, whether it be, uh, corporate tax, GST, energy tax, excise tax, EI, other revenue, and, of course, the, the, the, the awful carbon tax that they put on and then took off, you know, that generated in 2024, $459 billion in revenues.

00:04:27.260 Then, uh, Nick, go to the next one. Then they have the opportunity of, of looking at expenses so they can cut expenses.

00:04:34.580 Of course, there's always that. And, you know, of course, you know, you have transfers to people, which is basically the elderly, uh, child benefits, EI, or you can have, uh, transfers to the provinces.

00:04:48.140 You can have government or the crown corporation. So there's only so many ways to do it. Um, you know, and, and basically that's your opportunity.

00:04:57.260 And if you go to the last slide, Nick, you'll see that quite frankly, going into COVID, we kind of had this manageable, you know, we were at 13 billion roughly in deficits coming out of COVID, you know, in 2024, we're now at 60 and this guy gets up this, this interim PBO, he sits in the chair in front of everyone.

00:05:18.680 He says, well, it's, it's terrible. It's stupefying. It's not as bad as 95, but you know, it looks like we're going to carry $60 billion deficit.

00:05:27.260 So really what he's saying, I think, and this is where I wanted your opinion on, in my mind, he's saying to us that it's never going back.

00:05:36.480 You know, it's like one of those things that once you, once you get there, you know, like kind of like home prices, it's never going to go down again, which we're finding that's not the truth, but you know, it's not going to go back.

00:05:46.880 We're not going to reduce deficits and we're going to keep moving forward at 60 billion.

00:05:51.940 Okay. So my read is, is slightly different. Okay. So my, my read isn't that it can't go back. It absolutely can go back. Right. If you look at the, um, mid nineties under the Kretchen Martin liberals, uh, the deficit equivalent to today was about $150 billion. Right. And they were able to balance the budget.

00:06:09.880 In three years. And it was, uh, mostly due to spending cuts, right? Like you even talk about the bureaucracy. There was tens of thousands, uh, laid off or, or removed from the federal bureaucracy. Like, so we are in a similar scenario today. The deficit isn't as big, but like, like folks, like think about how alarming it is.

00:06:29.880 That those are the words used by the parliamentary budget officer, right? That wasn't me in committee saying, stupefying, shocking, something is going to break. This is unsustainable. That was the government's own independent, nonpartisan budget watchdog using those terms, right? That should be a fire alarm going off in the prime minister's office saying, you have to cut spending.

00:06:50.880 And I'll get into, you know, just how crazy spending has grown over the last little year, uh, over the last little while. But let me hone in on another number that the PBO didn't mention interest charges on the debt. They're going to cost taxpayers $55 billion this year. Well, what's $55 billion? First of all, that's a brand new hospital every single week that is not getting built because that money is going to pay interest on the federal government credit card.

00:07:17.880 Second of all, the federal government is wasting more money paying interest on the debt than what it sends to the provinces in healthcare transfers or think about it this way.

00:07:26.880 Interest charges on the federal debt will cost each Canadian $1,300 this year, right? That's 1300 bucks that the government is taking from Canadians, not going to services, not even going to pay down the debt.

00:07:41.880 That's 1300 bucks the government is taking from Canadians just to pay interest charges on the debt.

00:07:48.880 Yeah, no, I know. I get you. So here, Nick, go to the wheel from it. So, you know, we, we, we put this wheel up the other day, you know, and we were kind of joking around when we did it.

00:07:59.880 But what we said is, okay, now I'm sitting, I'm sitting in the government's shoes, I'm sitting there, you know, around the inner circle of the cabinet, and I have a number of decisions to make, right?

00:08:10.880 So, you know, what do you cut? And what do you grow? So if you spin the wheel, right, you'll see, you know, I have to figure out, you know, what is the first thing I cut? Okay, interest debt, like, you know, I guess, can I cut it? No, right? I can start getting it to go down, I can start moving the direction of it. But I'm, that's a fixed cost that I'm stuck with, right?

00:08:37.880 Well, the way to get interest charges on that, which, by the way, folks, if we talk about the government waste all the time, it's really interest charges on the debt that are the biggest waste of all, right? But the way that you get interest charges to go down is that you have to start chipping away at the debt, right? Which means you have to balance the budget, you have to stop borrowing money, and you got to start running surpluses to bring the debt down to lower interest charges or the interest payments on that debt.

00:09:03.880 Right? All right, Nick, next thing. So, so interest is going to be tough to do until you start going in that direction, right? Excise tax, right? So I don't know, what do you do with excise? So you're not doing as much trade. So what's going to happen? Is that a, you know, expense? Is it a revenue? Like, how do you generate any more from this category?

00:09:30.880 Well, you shouldn't generate any more from the excise tax. In fact, like, let me, let me talk about a form of excise taxation that has actually been really pernicious over the last couple years. And that's alcohol taxes, federal alcohol taxes. Okay, so since 2018, the federal government has essentially brought in an escalator tax on alcohol, right?

00:09:51.460 So the government has been raising alcohol taxes every single year without a vote in parliament, essentially since 2018. And we're at the point now where if you look at all the taxes you pay, okay, when you, when you buy a pint of beer to enjoy with the, with your buddies, when you're, you know, watching a ball game or a hockey game, about half the price of that pint of beer is taxes.

00:10:12.020 All right. Like, so every time you buy a beer, you're essentially buying another one for the tax man. You look at wine. Okay. You want to enjoy a glass of Pino with your better half. Well, about two thirds of that price is tax. And it's even more when you're buying like whiskey or rum or vodka. Right. So if anything, like there's no way the government should be taking more money from taxpayers through these excise taxes.

00:10:34.020 It should a eliminate this undemocratic form of taxation, right? Where, where politicians take more money from you, but they don't vote on it. And B, um, they also charge sales taxes on top of excise taxes, right? So, um, a lot of people know that when you go to the pumps, you're paying fuel excise taxes to federal governments and provincial governments. Well, the federal government charges its sales tax on top of the gas taxes, right? It's a tax on tax. So they got to eliminate that for sure.

00:11:02.160 Right. No, I agree. Totally. Nick, next one.

00:11:12.300 Oh, carbon tax, right? So government brought it, took it back, gave it back to us. You know, hopefully it's gone. You know, they saw it as a way to raise revenue. Then they just backtracked on it. Is it coming back? Are we ever going to see it again?

00:11:28.100 Well, you know, let me just add that in one way, the Carney government is, is pulling a bit of a sleight of hand, right? Saying that it got rid of the carbon tax.

00:11:37.460 Uh, Carney canceled the visible portion of the carbon tax, right? The consumer carbon tax. So that's at zero. That's the good news.

00:11:46.400 But the bad news is that there's still two other forms of hidden carbon taxes, right? There's a hidden carbon tax that the Trudeau government brought through fuel regulations. When those regulations are full and fully implemented, they'll cost up to 17 cents per liter of gas. So that's in a handful of years.

00:12:01.960 But then more to the point, um, Carney, and he fully supports this is the industrial carbon tax, the, the carbon tax on Canadian businesses, like fertilizer plants, like utilities, um, like, you know, steel manufacturers, and also like, uh, refineries, for example.

00:12:19.160 And here's the thing, right? Like when you increase costs for fertilizers plants with carbon taxes, well, that makes it more expensive for farmers to grow food and for Canadians to buy food. When you hammer refineries with these industrial carbon taxes, well, that makes it more expensive for you to fuel up your car with gas or diesel, right? So Carney hasn't gotten rid of all carbon taxes. They canceled the visible portion of the carbon tax, but Canadian businesses and Canadians are still paying federal carbon taxes right now.

00:12:47.960 Well, you know, and that, you know, that's a great point because I was going to bring it up under corporate, you know, from 19 to 24, you know, we saw a $32 billion increase in taxes to corporations. And, you know, I have a couple other companies aside from this. And, and recently I, you know, I noticed that, uh, electrical costs just zooming up, right? Like quite frankly, all the, uh, companies are charging almost double for electricity in the upcoming year, right? So it's interesting how costs keep growing and growing on that front.

00:13:17.960 So Nick, next one custom import duties, right? So what do you think down of course?

00:13:35.960 Yeah. Well, okay. So I'll just preface this big surprise. I don't think the government should raise a single tax. In fact, I think the government should be cutting, uh, many taxes, right? I think we, we kind of have to flip the script here in Canada and the way to dig us out of this mess, both, uh, government financially, but also economically is we need to go on a massive tax cutting campaign.

00:13:55.960 Now, specifically when it comes to tariffs, there's two things that come to mind. So number one, like, okay, Canadians have gotten really angry to say the least with the, uh, U S administration, right over the tariffs and, and things like that nature. But you know, when, when all this talk was really happening at the beginning of the year and into the election, my, my initial thought was like, wait until you find out how much your own governments are taxing you, right? Like Canadian governments are, are taxing away more from you than,

00:14:25.940 uh, the president south of the border. Um, okay. So the second thing is remember folks, like even a retaliatory tariff from the Canadian government, that is a tariff on Canadian businesses and Canadian consumers, right? So even a tariff from the government of Canada, that's paid for by Canadian businesses and Canadian consumers, right? That makes life more expensive. That makes it harder for businesses to be more productive. That makes it harder for us to attract investments. So look, uh, you know, just because the,

00:14:55.560 the U S because Washington DC wants to make life more expensive for Americans, that doesn't mean Ottawa should be making life more expensive for Canadians with these types of taxes.

00:15:04.560 Agreed. Yeah. And this, you know, definitely not going to go anywhere this year. So next one, Nick.

00:15:12.560 Oh, interesting. So other direct program expenses, right? So they, this is a category, which is kind of the government slush fund, right? This is all the other expenses that they put into other programs.

00:15:34.560 Um, you know, this is one definitely they can attack. I think this is where you were going at the beginning of the show, right? You got to dig deep and go through line by line and start to get rid of, you know, funding that they provide to all the programs, foreign abroad. 0.79

00:15:49.560 Yeah. Homeland, you know, these are the ones that grew. This is, you know, one of the big line items that grew, um, as we got going in, you know, it's interesting when we looked at it, it's a huge number.

00:16:01.560 Like, uh, uh, I'm just trying to find it here, but amazing how big this number is when you look at it.

00:16:08.560 Well, Hey, why don't I can give you some examples of where the government has to cut, but why don't I just set the stage here on in terms of spending over the last little while?

00:16:16.560 Okay. So look, um, the federal government under Trudeau was spending all time highs even before COVID-19.

00:16:24.560 Okay. So in 2018-19, the last year before COVID, the federal government was spending all time highs, even after accounting for inflation and population growth, which means that before any pandemic, before any recession, Trudeau was spending more than what the federal government did during any single year when we were fighting the Nazis.

00:16:41.560 Right. So let's just put that into perspective. Like the federal government was spending like crazy even before COVID. Then the pandemic happens and the government uses the cloud of COVID to go on a debt-fueled spending spree.

00:16:52.560 Right. Like of all the hundreds of billions of dollars in new announced spending 35% of it during COVID had nothing to do with the pandemic.

00:17:01.560 Right. So the government used the cloud of COVID to go on a debt-fueled spending spree. And, and since then from both Trudeau and now Carney, you see the government continue to spend billions upon billions of upon billions of dollars more every single year.

00:17:15.560 So like, no kidding. This is unsustainable. No kidding. The debt has more than doubled over the last 10 years. And no kidding. Canadians are getting absolutely taken to the cleaners because interest charges are now costing us more than a billion dollars every week.

00:17:28.560 Right. And this makes up, I just took a look actually, Franco on this, this makes up like literally almost a hundred billion dollars. This is a crazy number. Like, and, and every time I see this and it, you know, I know it includes stuff like defense and justice, but it is a very big number. So there is room for it.

00:17:47.560 Well, and you mentioned, you mentioned international aid or, or spending money overseas. Right. So let's break that down. So number one, global affairs Canada is the, perhaps the biggest waste offender in the entire federal government.

00:18:00.560 And that's saying a lot, right? Cause there's a lot of other departments that are, are spending money like crazy, but like global affairs Canada is the same department that spent that is spending $51,000 a month on booze.

00:18:11.560 They spend 8,800 bucks on a sex toy show in Germany. They spend 12 grand. So seniors in other countries could talk about their sex lives in front of live audiences. And these aren't even Canadian seniors, right? The government is outsourcing old people, sex stories. 0.67

00:18:26.560 Um, but then they're also wasting money on the big stuff, right? So if you look at all the departmental spending on, for example, foreign aid, uh, in the most recent year, the government spent about $11 billion on foreign aid.

00:18:39.560 Okay. That's almost twice as much as what the government spent through the entire department of veterans affairs.

00:18:46.560 Yeah. That's crazy that, that, you know, and you, we've talked about that before and that, you know, that's that, that, uh, that slush fund, I call it where money, you know, after they're through all our direct programs, they just put this big lunk, a hunk of change aside, you know, roughly $50 billion.

00:19:02.560 And it just goes all over the place. Nick, next one.

00:19:14.560 So, uh, this is interesting. We could spend a whole day on this one, Franco.

00:19:19.560 So, you know, and this is, you have your healthcare expenditures, which you hit on, and then you have all these programs, you know, as we go through and we see provinces aren't in deficits except for, you know, one, uh, quite frankly, you have all these other programs that the federal government, uh, puts money in subsidizes.

00:19:39.560 You know, that it starts at the provincial level, the municipal level, then it makes its way up to the federal level.

00:19:46.560 And of course, you know, healthcare, healthcare is a whole realignment we have to look at. So this, this line item, a huge line item, uh, but it really needs retooled all around.

00:19:57.560 Well, it does. I mean, and if you want to talk about, uh, the health transfer, I mean, look, first of all, um, what has to happen?

00:20:04.560 We have to see a change in our healthcare system, the way it's delivered, right? Like dumping more money into, or dumping more water into a leaky barrel.

00:20:12.560 You're just going to get water all over the floor. And that's essentially what's happening with healthcare transfers and really government monopolized or quasi monopolized healthcare here in Canada.

00:20:22.560 Right? So you have to fix the system. Uh, it's not just dumping more tax dollars into, like I said, the leaky barrel where you get water all over the floor.

00:20:30.560 But there's another transfer that honestly should be scrapped in its entirety and that's equalization, right?

00:20:36.560 We've had equalization in Canada for what decades now. So shouldn't there come a point where provinces are largely self-reliant, right?

00:20:45.560 Like the government already sends buckets of cash to provinces outside of equalization when there are major problems.

00:20:51.560 So like, why do we also have this equalization scheme on top of the health transfer on top of the social transfer, right?

00:20:59.560 What equalization truly is, uh, is a slush fund for premiers predominantly in the east who are wasting taxpayers money.

00:21:07.560 And so not only does it hurt the taxpayers, like for example, in Alberta who pay into equalization, but don't get a cent back right in recent years.

00:21:17.560 But it also hurts, uh, the people who are living in equalization receiving provinces because it incentivizes the premiers in the east to rely less on good policies to grow their actual economies and more on tax dollars coming from taxpayers in other provinces.

00:21:34.560 Like equalization is like equalization is such a bad scheme and it really does need to be ended.

00:21:39.560 And that's more than $20 billion a year.

00:21:41.560 Yeah, no, no. And we're never going to get off it because we're, we're hooked on it now, especially you're right in the east coast.

00:21:48.560 And, um, we did a whole show. It's interesting, you know, and for another day, but we did a whole show taking a look at comparisons between other countries and spend per caps on healthcare.

00:21:59.560 And it was astonishing what we found out, uh, and how much waste we have in our current system based on, you know, per capita numbers by countries. It was wild. So, um, please check that show out. Nick, next one.

00:22:14.560 Oh, so not much we can do with this, as you mentioned, right? So we'd love it to go down, but you know, at this point we can't raise more revenue. We're, we're almost, you know, to your point earlier, Franco, you know, that $459 billion, you know, it can, it can yo-yo a little bit in revenues for the federal government.

00:22:41.560 But there are many opportunities left on the revenue side, you know, like really, if you look at it, you know, we have, you know, we're really personal tax, corporate tax, GST, energy tax, um, EI and other revenues.

00:22:59.560 Is there anything you can think of we can generate more revenue for Canada, for the federal government?

00:23:05.560 The way that the government, if we want to talk about government revenues, right? First of all, take tax hikes right off the table, right off the table, right? Um, but for the government to generate revenue without raising taxes, you got to grow the economy, right?

00:23:21.560 That, that's, it's that, it's that plain and simple, right? A better economy means people spending more money. There you go. Sales tax revenue. It means people earning more, more people's jobs. There you go. EI goes down. Income tax revenue goes up. It means businesses come here. It means businesses are more successful. There you go. Uh, higher corporate income tax revenues without raising taxes, right? So if you want to talk about the revenue side, number one, no tax hikes. In fact, we got to go on a major tax cutting point.

00:23:49.560 In fact, we got to go on a major tax cutting campaign. But number two, the way to do all this is to allow investment and to allow our economy to flourish. And on that note, let me just say, right, a lot of debate right now going on with our natural resource sector.

00:24:04.560 Look, we are losing out on billions and billions of dollars over the years because you have these politicians, you have these ideologues, you have these activists who are making it nearly impossible for us to attract investment and build major natural resource projects here in Canada is those major natural resource projects like pipelines, but like many other things that allows us to have the money to pay for new schools, new hospitals, fix the roads, and to free up the room for tax relief.

00:24:34.560 Yeah, no, I'm with you. You know, that it really is, you know, and we talked about it on GDP show. It's picking projects that have a positive GDP impact on the country, right? So it's important at this point, given limited resources, it was financially, is to pick projects that are going to grow the country, right? Make us more productive, add to the economy, and to your point, generate more revenues.

00:24:57.240 So far, we're not picking those, right? So far, we haven't done a good job at actually identifying them, picking them, putting them into place, and putting our money behind projects that will grow our GDP, which that's why we've lagged in GDP per capita behind most of the developed nations for years.

00:25:13.660 Well, you know, let me say something a little bit outside of the box here. And, you know, just just stay with me here. But I actually don't think politicians and bureaucrats are the ones who should be picking which projects are so called in the national interest. Like, I really don't think that that's the way that we should go about it, right? What I the way that I think we should go about it, and maybe this is a little outside the box thinking, but it's instead of setting up a new office, a new government bureaucracy, right?

00:25:43.660 That's the root problem. Why don't we eliminate the overest or onerous regulations that the government had already put in place that is blocking the investment, right? Like at the end of the day, when politicians or bureaucrats are spending somebody else's money, not their own money, not their own skin in the game, you might as well just send them to the casino.

00:26:03.660 Like, like, there is no economic incentive for them to get it right. But also, they don't know which projects are going to succeed, they shouldn't be dumping taxpayers money into it. So instead of creating a new bureaucracy, I think the best way to go about doing this is just remove the barriers that the government already put in the way.

00:26:23.340 Yeah, no, no, no, I agree with you. I think that's sort of, and you know, your idea is a great idea. Quite frankly, you know, think tanks, which you see some of them, you know, where you're from up in Ottawa, you see some of these think tanks and people that sit down and create policy all the time, you know, getting outside people, entrepreneurs, you know, corporate executives to sit down and actually develop a business plan, right, that ties into where growth for the company is.

00:26:53.340 Yeah, that ties into where the country goes from a revenue perspective is a totally brilliant idea. And why not? They're the people that are doing it every day, you know, they're figuring out their company's environments and making recommendations to growth. I think that's a terrific idea.

00:27:07.340 Hey, last ones before we go, and I just want to get so, you know, expenses. So, you know, of course, you know, we left the last kind of two biggest ones, you know, for last. So major transfers to people, you know, so those are kind of the elderly, 0.72

00:27:23.320 you know, healthcare, you know, healthcare, or sorry, childcare, you know, and EI, right. And then the last one, probably left on the list that I can think of is probably the government spending the direct the operating costs, right. So, you know, he, you know, he's waffled, he originally said he was going to address some of these costs with respect to size of government, then, you know, they just said they do it by attrition.

00:27:51.320 You know, what are you hearing? And, you know, how does he address that? Because, you know, it's all sounds good. But those people, you know, again, you can cut, but then they become an unemployed unemployment rates, awful high right now.

00:28:06.320 It causes other issues. And I think really, in my mind, you know, it ties to your last comment, you have to create projects to migrate people to, right. So you have to have those positive projects in place.

00:28:20.320 When people come out of different industries, they can go to. So, and that's something I think we're not doing a terrific job on. And I think it needs a lot more work. But, you know, what's your thought on that? And, you know, it's one thing to say, just cut, cut, cut, but then these people have to, you know, feed their families grow.

00:28:38.800 So they have to go somewhere. I think mining resources is a really good idea. And shifting people up into the different areas where resources are a terrific idea. Thoughts?

00:28:50.800 Well, let me just start by saying the government has to cut the bureaucracy. This entire conversation, us climbing our way out of the dead hole, is completely futile, unless the government cuts its bureaucracy, right?

00:29:05.800 Let's look over the last 10 years, the government added about 100,000 extra federal bureaucrats and increased the cost of the bureaucracy 77% since 2016.

00:29:16.800 A 77% increase in the cost of the bureaucracy in a decade, okay?

00:29:21.800 Yeah, you've heard Carney all the time say balance the operating budget, balance the operating budget, balance the operating budget.

00:29:26.800 Okay, well, number one, that's not a real balanced budget if the government's still borrowing money.

00:29:30.800 But number two, the only way to do that is by firing bureaucrats. There's no other way. Like I can sugarcoat it. We can say attrition. We could say pay cuts. We could say bonuses, but that's not the truth.

00:29:43.800 It's just not the truth. Like it's unfortunate that we have gotten so far down the hole with a massive bloat in Ottawa that this is now the case.

00:29:52.800 The government has to cut the number of bureaucrats, right? That is the only way that we're even to start thinking about chipping our way out of this $1 trillion debt problem that we have.

00:30:01.800 And here's the thing, right? We commissioned a poll from Leger, a reputable national pollster that, you know, found that half of Canadians say federal services have gotten worse over the decade.

00:30:13.800 Not stayed the same. Half say they've gotten worse, even though the cost of the bureaucracy has gone up 77%.

00:30:19.800 So look, the number one single item in the budget that has to be cut, there's no way around it, is the federal bureaucracy.

00:30:27.800 And I'll just add that when the Martin Crutch and Liberals were able to extinguish a massive deficit largely through spending cuts in the 90s in just three years,

00:30:37.800 they also had to tackle the bureaucracy. There is absolutely no way around it.

00:30:42.800 So I think politicians just have to be honest with Canadians about the situation that we are and acknowledge that, yeah, there's going to have to be some government bureaucrats that lose their job.

00:30:51.800 Now, to the to the last point that you made, I'll just say two things.

00:30:55.800 Number one, government is not meant to be a white collar welfare scheme for government employees in Ottawa.

00:31:01.800 That's not right. That's not what government is here for. Right.

00:31:04.800 It's not here to subsidize white collar employees who take a taxpayer funded salary.

00:31:09.800 But number two, I do agree we have to be able to chew gum and walk at the same time, which brings us back to our conversation of allowing investment, allowing businesses to grow.

00:31:18.800 So when people are not employed in the federal bureaucracy, they'll be able to get good good paying jobs in the productive sector.

00:31:26.800 Yeah. Yeah. And you know what? It's it's interesting because, you know, you see it in America all the time.

00:31:32.800 People move, shift and pivot. Right. And so as times are changing in and these things are going to happen, the cuts probably, you know.

00:31:41.800 Well, right now, tell you the truth, at a 60 billion dollar budget deficit projected going forward, probably not it's going to not a lot is going to happen.

00:31:49.800 So if you're going to keep the same deficit moving forward and that deficit that, you know, the PBO talked about doesn't even include military spending.

00:31:58.800 Yeah. Billions, billions from the liberal platform that weren't even included there.

00:32:01.800 So, you know, we're looking at what sixty eight and a half billion is the baseline from the PBO.

00:32:06.800 That's a baseline. That's probably best case scenario.

00:32:09.800 Yeah. So add military and you're you're roughly you're around 100 billion.

00:32:14.800 So say you're around 100 billion, maybe a little less.

00:32:17.800 But, you know, that means you haven't really cut anything.

00:32:19.800 That means you've just progressed forward for the next four years.

00:32:22.800 Status quo, because 2024, you came out at a 61 billion dollar deficit anyways.

00:32:27.800 So you're just moving forward, not sustainable.

00:32:30.800 So, you know, that's why I think, you know, as we were talking, we need to get these projects on the books.

00:32:38.800 And as people shift and pivot, you know, it might be they have to move from where they're at.

00:32:43.800 You know, people will migrate to different places, change industries.

00:32:47.800 You see that more in other nations.

00:32:49.800 Canadians, I know, don't like to do that.

00:32:51.800 But that that is reality of the world today.

00:32:54.800 It is. That's reality.

00:32:55.800 And it's on our politicians to, one, do the hard work because, like, let's be honest, right?

00:33:00.800 They're going to have to go toe to toe with union bosses. 1.00

00:33:02.800 We saw the strike in 2023.

00:33:05.800 Like, I'm not suggesting that this is easy.

00:33:07.800 I'm not right there, but they're going to have to have the spine.

00:33:10.800 They're going to have to say, look, Canadians, this is the debt problem that we're in this debt crunch that we're facing.

00:33:16.800 We have to cut the size and cost of government.

00:33:19.800 And yes, that's going to mean hard decisions.

00:33:21.800 And yes, that's going to have to mean staring down these government union bosses who are going to, you know, scream that the sky is falling.

00:33:28.800 I'm not suggesting it's easy, but politicians have to be honest with Canadians with the scope of the debt crunch that we're in.

00:33:34.800 And they have to do the hard work.

00:33:37.800 Do you think do you think the messaging or the PBO messaging that we got just to end this?

00:33:42.800 You think that's the start of it or you think he's just new and he's just trying to be honest?

00:33:47.800 Well, I don't think the PBO is coordinating messaging with the government.

00:33:52.800 I absolutely do not think that.

00:33:54.800 I think he's just being honest.

00:33:55.800 Like, I've had conversations with the PBO.

00:33:57.800 We just interviewed him for the tax, the taxpayer show, and he said that he got into this because he really believes in transparency.

00:34:04.800 Right. Just being honest with Canadians.

00:34:06.800 Hey, Canadians, here are the books.

00:34:08.800 This is the problem that we're in.

00:34:10.800 And now it's on politicians and Canadians to debate those problems and move forward.

00:34:15.800 No, thank you, Franco.

00:34:16.800 I appreciate it.

00:34:17.800 And I'll definitely watch that show, too.

00:34:19.800 So thank you again.

00:34:21.800 And we look forward after November 4th.

00:34:23.800 I want to sit down with you again for a half hour and get your thoughts, because I'm super curious where he's going on November 4th.

00:34:30.800 Yeah, so mine.

00:34:31.800 I would love to come on the show and have that conversation about the budget.

00:34:35.800 All right.

00:34:36.800 Thank you.

00:34:40.800 Thank you.

00:34:41.800 Thank you.

The Wheel of Deficits： with Paul Micucci and Franco Terrazzano

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