Federal government spending on debt interest charges has increased by 36.7% in the third quarter of 2023, according to a report released Tuesday by Statistics Canada.
Franco Terrazzano, federal director for the Canadian Taxpayers Federation, has expressed serious concerns over the impact of these charges on Canadians.
“Taxpayers have every reason to believe this government isn’t serious about managing our money,” said Terrazzano.
While interest expenses incurred by the federal government increased by 36.7% year over year in the third quarter, the interest expenses of the provincial-territorial government grew by 10.7%.
The report showed that the federal government spent 10.1 cents of every taxpayer dollar to paying down interest. This ratio increased from the 7.9 cents spent per taxpayer dollar the year prior.
Terrazzano explained that taxpayers are losing billions of dollars every month as these funds can’t be used to lower taxes or improve services because that money is going towards paying interest on the government credit card.
“This should be a wake-up call for the feds,” he said, urging for a change in spending habits. “Prime Minister Justin Trudeau needs to put down the credit card and pick up some scissors.”
The Canadian general government’s surplus — including federal, provincial, and territorial governments — decreased by $3.4 billion since last year, leaving it at $3.6 billion in the third quarter.
This decrease is because the revenues grew at a smaller rate than the expenses. Revenues grew at $15.4 billion, or 5.4%, while expenses grew at $18.8 billion, amounting to 6.7%. According to the report, the main contributors to the increase in expenses are higher compensation of government employees and interest charges.
While the report did not break down revenue streams, taxes generally form the largest portion of government revenue.
The Canadian Taxpayers Federation also highlighted a pattern of fiscal mismanagement.
“Prime Minister Justin Trudeau said he would balance the budget in 2019, but he missed that by $20 billion,” said the taxpayers group, pointing to the government’s failure to meet its own budgetary goals.
According to the Parliamentary Budget Officer, the government is now not projected to balance the budget until 2035, and this projection is dependent on continued economic growth, relatively low interest rates, and no new spending.
“The problem is the Trudeau government is spending our money like crazy. This reckless spending means higher taxes, higher prices, more debt, and more money wasted on interest charges,” Terrazzano explained.
The federal government’s deficit was $5.3 billion in the third quarter, a decrease from the $7.1 billion deficit a year earlier. However, this improvement is overshadowed by the provincial-territorial governments moving from a $6.8 billion surplus to a $0.8 billion deficit, a decrease of $7.6 billion.