National
Federal debt interest will consume nearly one quarter of income tax revenue in 2024
From the Fraser Institute
By Grady Munro and Jake Fuss
The Trudeau government will table its next budget on April 16. In recent years, the government has overseen a substantial rise in the amount of interest it must pay to service federal debt, reversing a long-standing trend of interest costs declining relative to personal income tax revenues. By 2024/25, according to projections, nearly one in four dollars of personal income tax revenue will go towards debt interest.
Just like how individuals must pay interest when they take out a mortgage, the government must also pay interest when it borrows money. These interest payments represent taxpayer dollars that don’t go towards programs or services for Canadians.
When interest costs rise faster than the government’s ability to pay—i.e. the revenues it brings in—the government will face pressure to take on more debt to maintain funding for programs and services. And by taking on more debt, this places additional upward pressure on interest costs (all else equal) and the cycle repeats.
A useful way to track this is to measure debt interest costs as a share of federal personal income tax (PIT) revenues, which represent Ottawa’s single-most important revenue source. In 2024/25, they’re expected to comprise just under half (46.4 per cent) of total revenues and therefore provide a useful gauge of the government’s ability to pay interest on its debt. As such, the chart below includes projections for federal debt interest costs as a share of PIT revenues for the two decades from 2004/05 to 2024/25.
As we can see from the chart, for many years federal debt interest costs had been declining as a share of Personal Income Tax revenues. In 2004/05, 34.6 per cent of PIT revenues went towards servicing federal debt, but by 2015/16 that share had fallen to 15.1 per cent. In other words, during the Trudeau government’s first year in office, federal interest costs consumed less than one in six dollars of personal income tax revenue paid by Canadians. Interest costs as a share of PIT revenues continued to fall for the next several years, down to a low of 11.7 per cent in 2020/21. However, this marked the end of the decline, and the years since have seen rapid growth in debt interest costs that far exceeds growth in PIT revenues.
In the two years from 2020/21 to 2022/23, federal interest payments rose from 11.7 per cent of PIT revenues to 16.8 per cent. And by the end of the upcoming fiscal year in 2024/25, debt interest payments will reach a projected 23.4 per cent of PIT revenues. In four years, debt interest payments are expected to have gone from consuming about one in nine dollars of PIT revenue to nearly one in four dollars. Put differently, nearly one quarter of the money taxpayers send to Ottawa in the form of personal income taxes will not go towards any programs or services in 2024/25.
The causes of this sudden rise in interest costs as a share of PIT revenues are the combined effects of a substantial accumulation of debt under the Trudeau government, and a recent rise in interest rates. From 2015/16 to 2022/23, the Trudeau government added $820.7 billion in gross federal debt, and by 2024/25 total debt will reach a projected $2.1 trillion—roughly double the amount inherited by the current government. Meanwhile, from 2022 to 2023, the Bank of Canada increased its policy interest rate from a low of 0.25 per cent to the current rate of 5.00 per cent.
Simply put, federal debt interest costs have risen and are expected to eat up almost one quarter of federal PIT revenues by 2024/25. To help prevent taxpayers from devoting an even larger share of their tax dollars towards debt interest, the Trudeau government should cease its heavy reliance on borrowing in this year’s federal budget.
Authors:
Addictions
Poilievre attacks decriminalization of hard drugs with Safe Hospitals Act
New release from the Conservative Party
The Hon. Pierre Poilievre, Leader of Canada’s Common Sense Conservatives, announced his plan today to ban dangerous weapons and drugs and punish those who harm doctors and nurses.
The Problem:
After nine years, Justin Trudeau’s radical experiment of decriminalizing hard drugs has failed. Since Trudeau formed government, over 42,000 Canadians have died from drug overdoses. Nanaimo, for example, has seen a nearly 400 percent increase in drug overdose deaths in the last four years alone, yet Trudeau decided to allow opioids, cocaine, heroin, and methamphetamine to be used in public places like hospitals and parks anyway.
The results of this experiment have been catastrophic. Chaos and disorder have reigned free in public spaces across British Columbia. Our once-safe hospitals are being destroyed by criminals and hard drugs, with the B.C. Nurses Union ringing the alarm bell, saying that patients and staff have been exposed to harmful, illegal drugs. The BC Nurses Union also reported that meth was being smoked in a unit just hours after the birth of a newborn baby. In northern British Columbia, the public health agency put out a memo telling hospital staff to allow patients to bring knives and other weapons into hospitals.
Life became so miserable that BC’s radical NDP Premier asked Justin Trudeau to walk back parts of his wacko decriminalization policy. But the Liberals haven’t learnt from their mistakes.
The Cause:
Two years ago, the Liberal Government granted the BC NDP Government’s request to allow hard drugs across the province, including in public spaces. In the first year of this reckless experiment, 2,500 Canadians died from drug overdoses. Meanwhile, community spaces like soccer fields, hospitals and city squares have been devastated by crime and disorder.
But Justin Trudeau refuses to rule out the requests from Toronto Public Health and the City of Montreal to allow hard drugs in Canada’s two largest cities. He also won’t say whether hard drugs should be allowed in children’s parks, hospitals and public transit. On top of this, the Liberal Minister of Mental Health refuses to acknowledge that their dangerous experiment was a failure.
The Solution:
Common Sense Conservatives will not allow this devastating experiment to play out in other Canadian communities. Canadians deserve a government that will keep hard drugs out of hospitals and will protect staff and patients. We will:
- Create an aggravating factor for the purposes of sentencing if a criminal has a weapon in a hospital.
- End the Health Minister’s power to grant exemptions under s.56 of the Controlled Drug and Substances Act if the exemption would allow people to use dangerous illicit drugs like fentanyl and meth in hospitals. This means that even if Trudeau grants Toronto and Montreal’s request to decriminalize hard drugs, our hospitals will be protected.
- Immediately pass Common Sense Conservative MP Todd Doherty’s Bill C-321, which will create an aggravating factor for assault committed against healthcare workers or first responders.
To be clear, the ban would not apply to any drugs prescribed by medical practitioners like doctors and nurses.
The Safe Hospitals Act will stop some of the insanity that Justin Trudeau and the NDP have unleashed on Canadians with their plan to decriminalize the public use of hard drugs everywhere in Canada. A Poilievre government will ban hard drugs, stop giving out taxpayer-funded opioids, and reinvest that money in treatment and recovery so we can bring home our loved ones drug-free.
Poilievre said:
“Justin Trudeau’s decriminalization experiment has failed. It has resulted in death, misery and destruction across British Columbia, while our hard-working nurses live in fear of inhaling dangerous drugs or being attacked by criminals.
“Instead of learning from this catastrophic mistake, Trudeau has doubled down. He’s refusing to reject Toronto and Montreal’s request to allow hard drugs like fentanyl and heroin to be used in Canada’s two biggest cities.
“Common Sense Conservatives will keep doctors, nurses and patients safe, even if Justin Trudeau won’t. The Liberals and NDP must vote for this common sense Bill until we can form a government that ends this deadly hard drug decriminalization experiment for good.”
Addictions
Liberals shut down motion to disclose pharma payments for Trudeau’s ‘safe supply’ drug program
Liberal MP Majid Jowhari
From LifeSiteNews
The motion comes as RCMP testified in April that Trudeau’s taxpayer funded ‘safer supply’ drugs are being diverted to the black market.
Liberal Members of Parliament (MPs) resisted a motion to disclose payments made to pharmaceutical companies for “safe supply” opioids.
During a May 15 session in the House of Commons, Liberal MPs blocked a vote on a motion by Conservative MP Garnett Genuis to publish the contacts between Prime Minister Justin Trudeau’s government and pharmaceutical companies for “safe supply” opioids.
“Allow the public to see the contracts,” Genuis told the Commons government operations committee, questioning, “What do you have to be afraid of?”
“There are contracts involving this government and big pharmaceutical companies involved in producing and selling dangerous hard drugs which then end up on our streets,” he argued.
“Big pharmaceutical companies are involved in supplying hard drugs that are used as part of the government’s so-called ‘safe supply’ program,” Genuis continued. “These programs are a failure. We oppose them. In any event, we believe the public has a right to see the contracts.”
However, a committee vote on his motion was quickly blocked by Liberal MPs.
“I don’t think this is a motion we should move forward with,” Liberal MP Majid Jowhari said.
“I think we should go back and look at it and say our objective is to get an understanding of the source of safe supply and how it is being procured, which is different than going and saying, ‘Give us all the contracts,’” he continued.
Similarly, Liberal MP Irek Kusmierczyk claimed the request was a political tactic, saying, “They are against safe supply and safe consumption sites. That is clearly spelled out by my Conservative colleagues.”
Genuis’ request comes as the Royal Canadian Mounted Police (RCMP) testified in April that Trudeau’s taxpayer funded “safer supply” drugs are being diverted to the black market.
“Organized crime groups are trafficking not only illicit substances but any prescription drugs they can get their hands on,” Deputy Commissioner Dwayne McDonald, commander of the RCMP in British Columbia, testified.
Genuis put forward a motion asking that the committee “order the production of all contracts, agreements or memoranda of understanding to which the Government of Canada is a party signed since January 1, 2016” concerning the purchase of opioids.
Liberals’ refusal to release the contracts comes as the Trudeau government recently rejected a proposal from the Alberta government to add a “unique chemical identifier” to drugs offered to users under “safe-supply” programs so that authorities could track its street sales.
Indeed, the Trudeau government seems determined to pretend their “safe-supply” programs are a success despite the rising deaths and crime in cities that have adopted their policy.
However, the program proved such a disaster in British Columbia that the province recently requested Trudeau recriminalize drugs in public spaces. Nearly two weeks later, the Trudeau government announced it would “immediately” end the province’s drug program.
Beginning in early 2023, Trudeau’s federal policy, in effect, decriminalized hard drugs on a trial-run basis in British Columbia.
Under the policy, the federal government began allowing people within the province to possess up to 2.5 grams of hard drugs without criminal penalty, but selling drugs remained a crime.
Since being implemented, the province’s drug policy has been widely criticized, especially after it was found that the province broke three different drug-related overdose records in the first month the new law was in effect.
The effects of decriminalizing hard drugs in various parts of Canada has been exposed in Aaron Gunn’s recent documentary, Canada is Dying, and in U.K. Telegraph journalist Steven Edginton’s mini-documentary, Canada’s Woke Nightmare: A Warning to the West.
Gunn says he documents the “general societal chaos and explosion of drug use in every major Canadian city.”
“Overdose deaths are up 1,000 percent in the last 10 years,” he said in his film, adding that “(e)very day in Vancouver four people are randomly attacked.”
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