VANCOUVER, British Columbia, April 01, 2021 (GLOBE NEWSWIRE) -- The federal government is projected to spend $17,091 per Canadian in 2020/21, which is more than double what the government spent per person during the peak of the Second World War ($7,769) and nearly twice what was spent during the 2009 recession ($8,993), according to new research released today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.
And even before the COVID-19 pandemic struck, Ottawa was already spending at record per person levels.
“While emergency spending to deal with the fallout from COVID-19 and the recession was necessary, this additional spending adds to already record-high spending levels that existed prior to the pandemic which is going to make it much harder for government finances to recover in any reasonable time period,” said Jake Fuss, a senior economist at the Fraser Institute and co-author of Prime Ministers and Government Spending, 2021 Edition.
Current projections indicate federal program spending in 2021/22 will reach $11,370 per person, an increase of roughly 20 per cent from $9,500 in 2019, the year before the pandemic and already the highest level of per person spending (inflation-adjusted) in Canadian history.
What’s more, this level of spending doesn’t include new stimulus spending or new programs such as national daycare or national pharmacare, both of which have been suggested as potential big-ticket items in the upcoming federal budget.
Crucially, this marked increase in per person spending began well before the COVID pandemic. Between the last budget of the Harper government in 2015 and fiscal year 2018/19, inflation-adjusted federal program spending (total spending minus interest costs) grew from $8,063 per person to $9,061 per person, which at that point was the highest level in Canadian history.
“The federal government was already spending at record levels—largely with borrowed money—before the COVID pandemic,” said Fuss.
“As we look to recover from the pandemic and recession, policymakers should address Ottawa’s pre-existing spending problem or else Canadians will likely face higher taxes in the future to cover the resulting debt accumulation and interest costs.”
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Jake Fuss, Senior Economist
Fraser Institute
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The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of think-tanks in 87 countries. Its mission is to improve the quality of life for Canadians, their families and future generations by studying, measuring and broadly communicating the effects of government policies, entrepreneurship and choice on their well-being. To protect the Institute’s independence, it does not accept grants from governments or contracts for research. Visit www.fraserinstitute.org