Interesting Question was asked; where are we getting the money to fund these Government Programs?

BY SIMONE J. SMITH

“Despite the federal government’s borrow-now, pay-for-it-later approach to public programs, Canadians need to be aware that these new programs have significant costs that will have to be paid for by taxpayers eventually,”

(Jake Fuss, Associate Director Fraser Institute)

Last week, I received an eye opening email from the Fraser Institute, an independent Canadian: public policy research and educational organization. They currently have offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of think-tanks in 87 countries.

Their mission statement stemmed thought; it was 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.

They also noted that to protect the Institute’s independence, they did not accept grants from governments or contracts for research.

Hmmm! For me, it was worth taking a look. What did they know that was not being shared with the larger public?

Let’s start with what is being promised.

Dental Care

The budget proposed to introduce national dental care in 2022 for:

• Canadians under 12 years old
• Expand to under 18-year-olds
• Seniors, and disabled persons in 2023
• Full implementation by 2025

Only families with annual incomes under $90,000 would be eligible for the program with an estimated annual cost of $1.7 billion upon full implementation.

National Day Care Program

The national day care program aims to make daily fees equivalent to $10 for all regulated day care spaces in the country by 2025. Annual costs are estimated to total $7.9 billion upon full implementation of the program.

National Pharmacare

This part of the plan has not been formally introduced. The federal government has promised to pass a Canada Pharmacare bill by the end of 2023. They want to develop a national formulary of essential medicines and a bulk-purchasing plan for prescription drugs. The 2019 “Hoskins Report” estimated that once fully implemented, the national pharmacare could cost $15.3 billion annually.

Fraser Institute interviewed 1,509 Canadians between April 15^th and April 17^th, 2022. They found that support for the: $10-a-day day care, pharmacare, and dental care was 69% or higher when no changes in taxes were attached.

Support for these same programs plummeted well below 50% when an increase in the GST was attached to them.

Our elected officials are very good at finessing; that is their job. They want you to trust and believe in them. Unfortunately, regardless of their good intentions, there are always aspects of the dialogue that are left out.

Any increase in government spending must be financed in one of two ways: through higher taxes or borrowing. Governments can either tax today, or they can tax tomorrow in the form of borrowing today.

Fraser Institute’s analysis of Budget 2022 is that it continues to rely on borrowing (i.e., deficits) to finance new spending programs, which means the government is simply deferring tax increases to the future.

 “The reality of any new or expanded government program is that at some point Canadians have to pay for them, either in the form of higher taxes or less spending on other programs,” Fuss said.