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In her economic update last autumn, federal Finance Minister Chrystia Freeland set three main objectives for the 2024 budget.

The first was to keep the announced deficit in 2023-2024 at or below the 2023 budget forecast of $40.1 billion.

The second was to lower the debt-to-GDP ratio in 2024-2025 compared with the fall economic statement (42.7 per cent), and to keep it on a downward trajectory thereafter.

The third was to continue the decline in the deficit-to-GDP ratio in 2024-2025, and then to keep it below 1 per cent of GDP in 2026-2027 and beyond.

In her recent budget, the minister respects each of these objectives: the deficit for 2023-2024 is $40 billion; the projected debt-to-GDP ratio for 2024-2025 is 41.9 per cent; and the deficit-to-GDP ratio falls by 0.1 per cent in 2024-2025, to 0.9 per cent in 2026-2027, and declines further thereafter.

However, the fact that the budget targets are being met masks increased interventionism, leading to $57.9 billion in new initiatives between 2023-2024 and 2028-2029. Although the minister has identified additional sources of revenue (to which we will return shortly), the fact remains that the cumulative deficits over the entire period will increase by $10.3 billion.

The conclusion is that this budget is far from restrictive. Between 2023-2024 and 2024-2025, federal revenues will rise by 7.0 per cent, program spending by 6.7 per cent, and interest on the debt by almost 15 per cent.

Interest payments on the debt have risen significantly. After a low of $20.4 billion in 2020-2021, they are estimated to reach $54.1 billion in 2024-2025 and $64.3 billion in 2028-2029. It means that for the current year, Ottawa must now devote the equivalent of all the revenue from the GST to pay interest on the debt.

The finance minister will be seeking additional revenue mainly by reducing the preferential treatment given to capital gains. The impact of this change alone on corporations, trusts and individuals will exceed $19 billion over 5 years.

Since the Liberals came to power in 2015, many had........

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