Franco Terrazzano of the Canadian Taxpayer's Federation on our fiscal condition.
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Summary
As this bizarre pandemic-laden year rolls on, we re seeing fiscal updates from every level of government that are all looking quite frightening, to be honest. On today's show, we chat with Franco Teresano, the Alberta Director of the Canadian Taxpayers Federation (CTFF), to talk about what needs to be done at all levels of government to reduce our mounting debts.
Transcript
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Okay. Well, I'm sitting today again with Franco Teresano. He's the Alberta Director
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of the Canadian Taxpayers Federation. He's a fantastic guest because he always has so
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much to talk about because all our levels of government just keep giving him more to
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share with us. Rarely really great news, but they're being a great warped dog on the people
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that are handling our money or borrowing on our behalf. And as this bizarre pandemic-laden
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year rolls on, we're seeing fiscal updates from every level of government that are all
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looking quite frightening, to be honest. So Franco, thank you very much for coming on and
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why don't you give us a rundown of what you're working on these days?
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Well, thanks so much for having me on and might as well start close to home at the municipal
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level in Calgary. And we just saw them approve their budget adjustments for 2021. And it looks
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like your typical family will see a very small reduction in property taxes. So I guess it's
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a good thing that taxes aren't going up this year, but it's really not enough. I mean, this
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very small reduction for your typical family property, I mean, it doesn't even make up for
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the big tax increase that we saw in 2020 this year, right? Which was in the middle of an economic
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crisis. So, I mean, imagine this year, you're facing potentially a layoff or a pay cut, then
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you go home, you open your mailbox and courtesy of the city of Calgary, you've got a huge property
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tax increase, right? So, so this year's reduction, it's not going to make up for the 2020 increase.
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And really, we're just not seeing city of Calgary do what needs to be done and go further on on the
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Yeah, well, they barely touch spending cuts, but they're showing that what it's like a trend for
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them. They try to paint themselves as fiscally responsible during an election year, and then
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they'll end up doubling down on the tax increases on subsequent years. Have you gotten much response?
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I know you'd laid out a number of items, you know, for the budget that's coming up where they could
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reduce spending and cut spending. Did you see many areas where it looked like they were paying
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Well, we did see one area of restraint, and that was City Council voted to phase out the mayor's second
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pension. So I guess we got to give them some kudos there. But here's one thing, speaking of pensions,
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which is really unfortunate as of yet, is that we haven't seen City Council move on ending the second or
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third pensions for thousands of city employees. So we just saw City Council acknowledge that it's not fair to
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make struggling taxpayers pay into a second pension for the mayor. Well, when is Council going to recognize
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that it's not fair to make struggling taxpayers pay for second or third pensions for City employees? And these
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second or third pensions are topping up what is already a very generous primary pension plan for City employees.
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But, you know, the City of Calgary, they're not cut to the bone. They're still fat that needs to be cut.
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You know, on top of that golden perk, another thing that we've been pushing for a very long time is to end that
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corporate slush fund, Corey, which I know that you've been going on against. But at the end of the day,
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we just haven't seen City Council really take the spending problem seriously enough.
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Well, and on with our next level, with their hands reaching into our wallets, the increasingly empty
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wallets is the provincial government. And you guys have been talking a lot about the provincial fiscal
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update. What can you say and tell us about that?
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Well, unfortunately, Corey, it looks like I'm just really the bearer of bad news today
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because we got another bad news budget update from from the Alberta government. We're looking at I
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believe it's the largest deficit in the province's history this year. It's a little bit over 20 billion
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dollars. The debt this year, the provincial government debt is going to be close to a hundred
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billion dollars by the end of the fiscal year. That's that's over twenty thousand dollars that each
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Albertan has to pay back in provincial government debt if our government doesn't reduce spending.
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And, you know, that's just the debt. But Corey, as you know, we also have to pay interest
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on top of that debt. And this year, the interest costs are going to be over two billion dollars
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or more than five hundred dollars per Albertan. So that's five hundred dollars in interest charges
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that are leaving your pocket. They're not even going to government services because they got to go to
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Toronto. They got to go to the bond fund managers on Bay Street just to service the provincial debt.
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Yeah, it's a kind of ironic that some of the supporters of big government claim that they're
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against big business, yet they don't seem to know where those interest billions end up going
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into the pockets of rather than the little guys who actually are paying that bill. There's more few
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things more painful to watch than money being burned on interest. We just see so little from it
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for ourselves. And then, well, just to cap off the trifecta here of budget bleakness, the federal
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government gave us a fiscal update today, which looked no different than the others, I guess.
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Well, it's very astonishing. We're merely weeks away from the federal government's debt getting the
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one trillion dollar mark. That's one trillion with a T. We're weeks away from it. And really,
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there's a bunch of things that should be concerning taxpayers, but especially Alberta taxpayers. So
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the first is that we've gone, what is it now, like 20 months without seeing a budget from the Trudeau
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government. We need to see better from our politicians and that. Another thing that's very
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concerning is that we're hearing about a hundred billion dollar so-called stimulus spending that's
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going to be happening. Get this, not during the downturn, but once the economy starts recovering,
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you know, it would be bad enough to be spending that kind of money during the downturn, right?
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Having government, having bureaucrats, having politicians trying to pick business winners and
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losers. But to be doing that once the economy is already recovering, I mean, come on, right? We don't
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need politicians playing investment banker. We need tax relief. And here's another takeaway is that we
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haven't been seeing the federal government talk about a fiscal anchor or fiscal targets. You know,
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Alberta's bad news budget, it was bad news, but at least the Alberta government is setting fiscal anchors,
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like grading spending in line with similar provinces. But we're not seeing that similar type of budget
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targets from the federal government. Well, those numbers are just staggering. Like,
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so that's a hundred billion dollars of untargeted spending, essentially. I mean, yeah, as you said,
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with Calgary economic development, with a hundred million dollars that they've been wasting and they
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have been, we haven't seen benefit from it. That's a thousand times that amount. That's not,
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it's just, it boggles the mind. It's frightening. Why though, I mean, something that's interesting,
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you know, most economists are talking about, because basically we've been borrowing, printing money,
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borrowing, printing money. Typically we should be seeing some heavy inflation starting and that
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hasn't happened yet, which is, I think a good thing because the banks respond to raising interest rates
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and then we just get that calamitous turn of events that'll really lead to a crash. But why are we
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seeing these interest rates rising or the inflation rising yet? Well, Corey, you know, I think it's
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difficult. And I think you asked five different economists and you might get six different answers,
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right? I don't have, I don't have the crystal ball, but I think another thing to remember is
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these types of questions are very difficult because you have to be comparing them to counterfactuals.
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Who knows what inflation would be happening right now? You know, maybe we would be,
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we would actually be seeing prices going down during a downturn, you know? So it's very difficult to see
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that. But here's what we do know, right? Is, is these massive debts that we're seeing
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provincially in Alberta and all also at the federal levels, we got to pay this back one way or another,
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right? And the only way you're going to pay this back is either if the federal government and the
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provincial government starts to tighten its belt and reduce spending, or it's going to be paid back
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through taxes today, taxes tomorrow, or through inflation, which is another type of tax. So what
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we do know is that eventually the, you know, we, we're going to have to pay it back. And I think what's
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so concerning for Alberta taxpayers, not just with the provincial government debt, but federally as well,
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is, you know, we've already been paying more than our fair share of Ottawa spending for a long time.
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So that's why I think that this debt situation is especially concerning for Alberta taxpayers.
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Yeah. Well, we just don't have the resources to disproportionately dedicate to paying off federal
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spending excess that we used to. Yeah. It's unfortunate that we've got such a bleak, immediate
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outlook, outlook ahead of us. Hopefully that changes somehow as there's maybe some common sense,
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there's the rain and we start bringing this pandemic under control. Where can we find more
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information on what you and the Canadian Taxpayers Federation are up to, and perhaps how we can help
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keep spreading the word of some fiscal common sense in this country while we can?
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Well, please head over to taxpayer.com. We've got a few good pages on there. If you want to learn more
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about what we're talking about, go to taxpayer.com, check out our newsroom tab. And also if you want to,
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if you want to help us make some, put some good change here to lower taxes, to get fiscal
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sanity back here, head over to our petitions page and sign a few of our petitions.
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All right on. Thanks, Franco. And I'm sure one of these times we're going to have you on,
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it'll just be one big good news update on a government that put things under control.
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I mean, people shouldn't hold their breath for quite yet, but it's going to happen. You're young,
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Wouldn't that be nice. Thank you so much for having me on.