You are a contented Liberal voter who is sleepwalking to cast your ballot for the Trudeau government once again. Maybe you are a middle-class voter with a good job, a small business owner, a retiree with investments and a pension or a young person just starting out. You should be safe in assuming that the good economic times and Liberal policies will continue to your benefit, right? Well, no — there is an alternate reality coming your way over the next four years if the Liberals retain power.
First, the deficit — apparently no one cares that the Liberals will run $25-30 billion deficits for the next four years on top of the $100 billion in debt that was added during their first term. If we have an economic slowdown, the structural deficit the Liberals have created during the longest economic expansion in 75 years will balloon to more than $50 billion a year due to reduced revenues and increased EI payments to the newly unemployed. Taxes will have to rise as a result, just at the point when consumers will be looking for extra money in their pockets.
The Liberal boutique-style giveaways like canoeing and camping trips for low-income kids are great political photo-ops but are poor economic policy. We would all have been better off with generally lower taxes, and the uncomfortable truth for the middle-class is that their taxes rose over the last four years.There is also the impending squeeze from the carbon tax that ultimately is paid by the consumer. As a middle-class Liberal voter, you are a big loser.
The Canadian government has been encouraging small business to modernize and export, but what has happened to our export markets? The USMCA (NAFTA 2.0) trade agreement with the US and Mexico is unlikely to pass due to the political wrangling over impeachment that is distracting the US Congress – it would have been negotiated and passed much earlier had the Liberals not tacked on a whole list of social agenda items that merely annoyed the US trade negotiators and were eventually scrapped or ignored. Our alternative trading partners overseas like China and India no longer take Canada seriously after an embarrassing Indian visit and a disastrous Chinese free trade foray where Trudeau lectured the leadership in Beijing.
So, small business owner, where are you going to sell your stuff? Well, maybe you can try Europe, you know, that mature market where the consumers are tapped-out and they have a strong preference for EU products. This is not what the Liberal business voter endorsed in 2015.
As a retiree with a pension, the ability of the government to sustain its programs like health care transfers to the provinces and federal pensions is important to you. If the deficit approaches $50 billion per year in a recession, it will challenge the sustainability of Canada’s social safety net. Falling confidence in the Canadian dollar may re-ignite inflation in Canada, which will erode the purchasing power of your fixed-income investments. Older voters could be the biggest losers in a Liberal second term.
Finally, for young people just starting out, your future is being mortgaged to pay for the Liberal deficits that were not necessary from 2015 to 2019. Trudeau inherited a balanced budget and a total national debt of some $620 billion. Today’s debt is some $760 billion with deficits in the double-digit billions each year. That debt will be financed by your future taxes, which will make it harder for you to pay your student debt, finance your house, or start a business. All this because the Liberals did not want to trim spending on old initiatives that were no longer relevant in order to fund their campaign promises. For you, sunny ways are replaced by a cloudy future.
All of this is going to take a long time to fix. Don’t vote for the Trudeau team who betrayed your hopes from 2015.