Policy Objectives: to support and ensure a free, dynamic and growing economy; to emphasize and remember that “government money” is taxpayers’ money and that government is a steward of that money, with a moral obligation to spend that money wisely, and is accountable for how it is spent.
Policy Action Items: 1) end corporate welfare, no more subsidies; 2) repeal carbon tax; 3) allow development of infrastructure by private sector to encourage energy sectors in British Columbia, Alberta and Saskatchewan; 4) no more deficit spending; and 5) downsize government and prioritize government spending so that expenses are equal to revenues.
At the outset, let’s get one thing straight: Government money is taxpayer money. Period. Government does not create wealth; it can only redistribute it. Government doesn’t “earn” money the way ordinary Canadians do—through the voluntary exchange of services for wages or the creation of the “better mouse trap.” No, government “earns” its money through mandatory confiscation of your property.
Governments’ ultimate source of revenue is the taxpayer—money that hard-working Canadians are coerced to pay in the form of taxes (income, excise, PST, GST, HST, carbon taxes, estate taxes, etc.) and user fees. Much to the dismay of statists, there is no magic money tree that governments can harvest to raise revenue—governments’ only recourse is to pick the pockets of taxpayers. Thus, when we see or hear advertisements saying that “this message has been brought to you by the Government of <insert level of government here> it really should be “this message has been brought to you by the Taxpayers of <insert level of government here>.”
Economic Freedom Inseparably Linked with Political Freedom
Given the size, levels of, and its taxing power, governments’ impact on the economy and our political freedoms is enormous.
Accordingly, we would do well to remember the simple axiom that political freedom is commensurate with economic freedom. The less economic freedom one has the less political freedom. This means that government interference in the economy through taxation, regulation or the freezing of innocent Canadians’ bank accounts has a direct bearing on political freedoms.
That is not to say that there is not a legitimate role for government to play in the economy, but that roll is limited to ensuring that markets are free from manipulation and fraud. Government does not have the wisdom or prescience to pick winners and losers in any sector of economic activity. Government “investment”—whether it is in battery factories, pipelines, or media newsrooms, is nothing but political graft and corruption masquerading as “government stimulus”. Corporate welfare must stop. Moreover, mandated economic interference such as the Electric Vehicle mandates, need to be rescinded. The most economically efficient way to sort out the viability of EVs is through the free market, unimpeded by false and distorting pricing signals of government subsidies. These fundamental market/social changes ought to be the result of consumer demand, not government dicta.
Immorality of Deficit Spending
Deficit spending means a number if things, including: spending more than you earn; poor allocation of limited resources; corruption; and taxing the next generation(s) for poor decisions made today.
Of the four examples given above, perhaps the last one is the most egregious, that of taxing future generations. Deficit spending represents, in effect, taxation without representation, a direct violation of the requirement of the consent of the governed which is necessary to give government its legitimacy.
Deficits by their very nature are an attack upon not only government’s legitimacy but are also an existential threat to the country’s survival. Running up deficits year after year as the Trudeau regime has done, has consequences. A report (“Examining Federal Debt in Canada by Prime Ministers Since Confederation” July 2022) from the Fraser Institute noted that since Justin Trudeau came to office, federal per-person debt (each person’s share of the national debt) has increased by 35.3% between 2015 and 2022 and now stands at some $47,070 per person. Given Trudeau’s continuing economic policy disasters and spendthrift ways, that debt will only increase and continue to take the country in a direction that a clear majority of Canadians know to be the wrong direction.
Quite apart from inter-generational legitimacy, a government that can’t meet its debt obligations is a government that can’t be trusted. Trust, whether we like to acknowledge it or not, is the lifeblood of democratic institutions and the country as a whole. The extent to which a government continues and normalizes deficit spending, making promises that future generations will be burdened with is a government that cannot be trusted.
Cutting Waste in Government
The Nobel winning economist Milton Friedman’s observation that “Nobody spends somebody else’s money as carefully as he spends his own” provides a keen insight into the chief problem with government spending: government is not spending its own money.
Moreover, as economic resources are limited, whatever government takes out of the economy through taxes means that there are less resources available in the private sector for spending and saving opportunities. This is true whether you are a corporation or entrepreneur looking to invest in a new plant or product, or an individual or family looking to save and invest in a house, an education or retirement.
Despite government’s incompetence at spending, one thing government does do very well is waste money. Reports from the Auditor General are rife with multiple examples of cost overruns and failed programmes. Indeed, a week does not go by where there are not stories about the latest government boondoggle, whether its failed bilingual targets despite spending $7.7 billion since 2004, misappropriations in defence spending, or extravagant spending on hotel rooms and travel.
The two easiest ways to stop wasteful government spending are: (1) to stop government spending; and (2) limit government spending to essential areas, such as defence, with appropriate accountability including transparency in bidding and establishment of failure standards to hold politicians and bureaucrats accountable for cost overruns and programme failures.
There is no greater “hidden tax” than inflation. Consumers and taxpayers are the hardest hit by inflation. In contrast, government benefits the most from inflation for two reasons. First, because it pushes taxpayers into higher tax brackets (bracket creep). Second, because government “prints” the money, it gets to spend the inflated money first, in effect at its then current value before it begins circulating and subsequently becomes worth less and less due to the increase in the amount of money in circulation.
Apart from defence of the realm, there is no more higher duty or obligation imposed on government than to ensure a stable money supply. Government policies that encourage and promote inflation, such as automatic tax/spending increases and deficit spending, ought to be forbidden, except in time of actual war.
Psychology and the Economy
At the end of the day, a healthy economy is as much a matter of psychology (positive thought) and consumer confidence. Government economic policy ought to be animated to ensure both by cutting government spending, lowering taxes, avoiding deficit spending, and paying off the national debt.
Government policy ought to be focused on growing the middle class, which means stable families and rewarding individual initiative and hard work. One of the most efficient means of signalling government’s awareness of its responsibilities to the middle class (which includes lower income Canadians) is not only tax reduction together with the outright elimination of regressive taxes such as the Carbon Tax, excise tax and the new (2022) Underused Housing Tax, but also with meaningful tax reform that eliminates automatic tax increases and pay increases for members of Parliament (a cause of inflationary pressure) but also aimed at simplifying the paperwork required to file one’s annual income tax return.
There is no better path to ensure and promote a healthy economy than by transparency, accountability and a government living within its means. Such a path is discovered and navigated by recognizing two undeniable realities: first, there is a difference between “wants” and “needs”. We all want things, but what we need is actually a fraction of what we want; and second, the recognition that government cannot centrally plan an economy to be prosperous—only free individuals meeting their familiar and social obligations through voluntary exchanges of time, talent and value can provide for a healthy, vibrant and sustainable economy.