Kelowna-Lake Country MP Tracy Gray. Last week, we saw the federal finance minister’s table (the government’s autumn economic statement), essentially a ‘mini-budget’ that gives us a snapshot of our economic forecasts and the government’s plans. With Canada now facing 40-year high inflation, the statement was widely expected. I am disappointed by the results, however, which ignored weeks of Conservative calls for immediate tax relief and easing of government spending. Young adults, families, seniors and people with disabilities often write to me about the difficulty of affording the ever-increasing costs of groceries, gas and heating. Labor shortages and supply chain issues across our economy still need to be addressed. The government’s proposals involve more inflationary incentives, which will only increase costs further. Worse, the statement predicts that a recession is now likely in 2023. Independent government officials, such as the Parliamentary Budget Officer, have also recently released their analyzes of Canada’s economic situation. I’ll look at some of the bigger takeaways from my perspective when I look at the PBO’s detailed report on what’s estimated to come down economically over the next two years. I will focus on three areas—employment, the federal debt, and inflation. First, the PBO estimates that the unemployment rate will rise in 2023 to 5.8%, with people retiring as a major factor. If the projected recession hits next year to levels some economists predict, the unemployment rate could certainly rise further and we’ll see a shift away from “help wanted” signs to companies having to downsize in some sectors , while others will still struggle to get the skilled workers they need. Second, the PBO sets out the federal government’s and states’ estimated levels of revenue and debt, “despite a projected reduction in the budget deficit; public debt charges are projected to more than double from their 2020-21 level ($20.4 billion), reaching to $47.6 billion in 2027-28 due to higher interest rates and additional federal debt accumulation.” As the finance minister talks about how the federal debt should be lower (even though it’s the highest it’s ever been in Canada), the PBO reports that public debt charges will actually more than double. That means we pay more for that debt. One comparison is that it’s like doubling the interest you’ll be charged on your monthly credit card bill. As you make payments, your total bill could slowly decrease, but every dollar you put down will be worth less because it will take much longer to pay off the debt and you’ll pay much more overall. The third is our high inflation. PBO estimates show federal government revenue growing annually through 2028. The estimated increase is more than $40 billion from 2022 to 2024 alone. We all know that inflation has reached 8.1% this year, with food costs even higher, and the increase in government revenue is mainly due to higher inflation adding tax revenue. In addition, the government increases payroll tax, excise duty and carbon tax to bring in more revenue. These increased tax dollars in government coffers, based on inflation and tax increases, do not reflect a healthy economy. This extra income goes to seniors, families, young adults, small businesses, not profits. As we head into a tumultuous 2023, I will continue to represent the residents of Kelowna-Lake Country by advocating for solutions that will preserve jobs and reduce costs. In the meantime, with Veterans Week and Remembrance Day, I hope everyone in Kelowna-Lake Country will join me in taking a moment to recognize those who have bravely served Canada in times of war, conflict and peace. We also honor those who continue to serve our country today. Kelowna City Park has the Field of Crosses display and poppies were available for purchase in our community (until Memorial Day today) to help support local veterans and their families. Lest we forget. If you need help with programs or have any thoughts to share, please feel free to contact 250-470-5075 or [email protected]. This article was written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.
