In certain circles there’s speculation the Liberals economic policy might lead Canada off a fiscal cliff.
We already know they plan to run up deficits close to $150 billion over the next few years – with no plan in sight for a balanced budget until 2055.
The problem is, all of this deficit spending comes at a price.
Kevin Page, former Parliamentary Budget Officer and current president of the Institute of Fiscal Studies and Democracy at University of Ottawa has this warning:
“If you look at the history of countries running up debt, they sleepwalk into this stuff. There’s a bit of a boom, they say, ‘Let’s do something for the middle class, for infrastructure, for childcare.’ But this stuff is structural and once rates start normalizing, debt gets really heavy,” …. “We’re re-living the ‘80s and early ‘90s.”
Under the first Trudeau era, interest rates skyrocketed as debt levels spiralled out of control.
Today, if Trudeau 2.0 keeps spending the way he is, one has to wonder what kind of sunny ways will exist for millennials, dealing with 17% mortgage interest rates, just like their parents and grandparents had to, when Justin’s dad was PM.