Missed Opportunity: Federal Spending Increases Prevent Real Tax Relief for Canadians
14 September 2023
- Federal per-person program spending has reached unprecedented levels in recent years, which puts a heavy burden on Canadian taxpayers who are ultimately responsible for footing the bill either through taxes today, or taxes tomorrow if the government allows debt to accumulate.
- This bulletin calculates an alternative fiscal path by assuming that the federal government exercised spending restraint starting in 2015/16.
- Program spending is currently projected to reach $453.0 billion in 2023/24. The alternative scenario includes program spending of only $399.4 billion for that same year—a difference of $53.6 billion.
- Budget 2023 projects the federal government will run a $40.1 billion deficit for the 2023/24 fiscal year. The alternative scenario projects that the federal government would have run a $23.3 billion surplus.
- The surplus in the alternative scenario is such that the federal government could have eliminated the second lowest personal income tax bracket, thereby providing $18.7 billion of tax relief, while still running a surplus of $4.6 billion in 2023/24.