With the federal Parliament back in session, The Hub’s editor-at-large, Sean Speer, spoke with Conservative MP Adam Chambers about some of the big economic and fiscal issues that are likely to animate the upcoming session, including the likelihood that the government will stay within its own fiscal guardrails in the 2024 budget.
SEAN SPEER: As the House of Commons gets set for a new sitting, what issues do you think will animate the debate and what are you hoping to see out of the government?
ADAM CHAMBERS: Given that we return in the middle of budget season, I am hoping that we will see a restrained fiscal plan from the government. But recent history and habits don’t leave me encouraged.
The government has increased spending on average nearly 6 percent per year since coming to office. Relative to pre-COVID levels the Liberals are spending roughly 25 percent more each year. And the Bank of Canada is now publicly pleading for help from governments to slow its spending growth so inflation can be contained.
In a couple of months, Statistics Canada will release its household income survey, which will update the poverty line and income levels in Canada. These results will be sobering as they will show the devastating effects that inflation has on low and fixed-income households in Canada. These data will further highlight the cost and consequences of the government’s inflationary spending. Only Conservatives have been warning that the government’s policy choices through increased spending and increased taxes on energy would ultimately contribute to making life more unaffordable for Canadians.
SEAN SPEER: As a member of the Official Opposition, one tension that you must deal with is the balance between prosecuting your case against the government and setting out your own policies and priorities. How do you think about that balance? And should we anticipate more details about the Conservative Party’s own policy programme over the coming months?
ADAM CHAMBERS: Every day presents a new scandal or misstep from government. It is our job to prosecute the government and hold it accountable for its decisions that have led to the considerable hurt to Canadians. In time, we will be releasing more ideas on what a Conservative government will offer to Canadians. However, I recommend anyone to listen to the recent speeches or videos by Mr. Poilievre, many of which highlight the party’s key themes—namely: Make work pay through lower taxes. Build homes. Fix the budget. Stop the crime.
It is worth mentioning that the government has already stolen a few Conservative ideas for their own. Consider for instance the tying of federal funding to municipalities based on zoning regulations and densification around transit. This was announced last spring by Mr. Poilievre only to have the Liberals borrow that idea this fall. While flattering, it is a signal the government is out of ideas and scrambling to find solutions to problems that it previously claimed didn’t exist.
![](https://thehub.ca/wp-content/uploads/2024/01/Hub_Forum_BannerB_Jan2024_HaveOpinion_1726x530_v1-1170x359.jpg)
SEAN SPEER: The 2024 budget is no doubt being worked on as we speak. What should we be looking for to judge whether the government is actually prepared to abide by its own fiscal guardrails including limiting the deficit to 1 percent of GDP over the next couple of years? And what are the risks if it fails to do so?
ADAM CHAMBERS: Spending must be restrained as I mentioned earlier, but the Liberals have broken all other fiscal anchors, so there is reason to be skeptical. This is particularly surprising because inflation has driven up government revenues to record highs. Yet instead of using this extra revenue to improve Canada’s fiscal position, the Liberals have steadily increased spending. Old habits die hard. In eight years, the government hasn’t reduced a single program. I don’t expect them to start making difficult decisions now.
In light of that backdrop, the government is going to have a hard time meeting their own guardrail of keeping annual deficits to 1 percent of GDP. Recent analysis by the Business Council of Canada suggests that in the post-Second World War era, the federal government has managed to record a deficit of less than 1 percent of GDP only twice when government spending exceeds 17 percent of GDP.
Moreover, anyone who is not worried about Canada’s fiscal position is making a significant gamble on a “soft landing”—that is, that there will not be any serious economic downside events over the short and medium term.
Any economic downside will significantly erode the fiscal capacity of the government. We are now spending $50B a year on interest on the debt. These debt service costs which already run over 10 percent of government revenues necessarily reduce the government’s flexibility to handle economic shocks. Unfortunately, that share will grow as the government rolls over $300B in borrowing this year due to its negligent decision to take on mostly short-term debt during the pandemic. This borrowing is now being refinanced at significantly higher rates and Canadians are paying the price.
Recommended for You
![](https://thehub.ca/wp-content/uploads/2024/09/CP170606389-120x120.jpg)
Alister Campbell: Pierre Poilievre has a chance to be a transformational Conservative PM. Will he seize it?
![](https://thehub.ca/wp-content/uploads/2024/09/CP14691571-120x120.jpg)
The Weekly Wrap: Stop complaining, New Democrats—Justin Trudeau was your first NDP prime minister
![](https://thehub.ca/wp-content/uploads/2024/09/CP172996284-120x120.jpg)
The Week in Polling: Canadians think Justin Trudeau is the worst modern PM, students having trouble getting jobs, and concerns about immigration quadruple
![](https://thehub.ca/wp-content/uploads/2024/09/CP170256947-120x120.jpg)
Howard Anglin: Canada’s government is unaccountable and broken. But is it beyond repair?
![](https://thehub.ca/wp-content/uploads/2024/09/CP168649211-120x120.jpg)