Federal Budget 2021 takeaways – NOT FOR THE FAINT OF HEART

In short, government wants your money to launder it and give it back to you under the spending they think is right instead of you making your own decisions with the income you earn. Somehow, they feel that they are better at telling you how to spend your own money better than you are.

Freeland was quoted as saying the budget will return to “restrained spending” once the pandemic is under control, but the Trudeau Liberals have been spend-happy since being elected in 2015. From 2016-2020, the Liberals got into trouble early and were $91 Billion in debt before the real impact of the pandemic started. She also tweeted that this budget is about creating jobs and prosperity – but jobs and prosperity are always as a result of creating an environment that allows for people to make the right decisions for their own lives and improving the financial security for their own future, not from spending taxpayer money to do so. Any job a government has ever created in the marketplace has always been done at the expense of someone making another investment, or a temporary measure at best.

Here’s a short summary of some of the bad and ugly:

• Deficits were $354.2 Billion ending March 2021, and expected to be $154.7 Billion in March 2022, and $30 Billion in March 2023.
• They are hoping to have the Debt-to-GDP less than 50% by 2025.
• The annual debt-to-GDP will average 5.8% of GDP in the next 5 years.
• The government will add $286 Billion in bonds this year. Last year, 70% of the $374 Billion of bonds were bought by the Bank of Canada with new money. If this repeats, then there will be another huge jump in monetary supply.
• Between 2020 and 2025, the government projects total new federal debt of $686 Billion
• In addition to other debt, they will be issuing 50-year bonds. (Who in their right mind is thinking about going long in bonds and therefore who is going to buy a 50-year bond at 1 or 2%)
• Federal Minimum wage is going up to $15/hr which is empirically proven to increase unemployment for younger and less skilled people and, over time, increase the price of goods and services.
• Spending to small business is going to $16.3 Billion; but spending on one company is already at $6 Billion. (who can really tell who has the largest bribery scam going on)
• Businesses will have new limits on interest cost deductions.
• New Federal taxes on digital services such as Spotify, Netflix, Disney + or LinkedIn premium.
• A new Federal Luxury tax.
• A National foreign buyer’s tax on vacant properties (because that affects about 10 sales in Vancouver per month and I don’t think they’re buying properties in Lloydminster – no offence Lloydminsterites).
• New duty on cigarettes and a new tax on vaping.

The bottom line is that all government spending is based on hope and nothing empirical. They "hope" to raise revenues. They "hope" future tax increases will fund everything they want. But they keep wasting billions. Almost $40 Billion in interest payments soon. Where could that money be better spent?