A report maps out why the government’s fiscal plan is impractical and why, if the economy deteriorates, Canada’s finances are unsustainable
The answer, according to a new research paper co-authored by former Bank of Canada governor David Dodge, is: absolutely.Sign up to receive daily headline news from Ottawa Citizen, a division of Postmedia Network Inc.By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails or any newsletter. Postmedia Network Inc.
The government’s claim is that spending in real terms per capita will fall sharply over the next five years.Article content Dodge worked as deputy to then finance minister Paul Martin in crafting the ground-breaking 1995 budget, at a time when more than 30 cents of every dollar went towards interest payments. The experience has clearly scarred him, and he has cautioned against this country ever again allowing debts to build up to the point where the return of high interest rates starts eating a larger and larger fraction of revenues.
Past performance is highly indicative of future results, and this is not a government that has managed to rein in spending the way its own numbers suggest it will have to
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