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CHARBONNEAU – Raising taxes not the way out of debt created by COVID-19

Finance Minister Chrystia Freeland. (Image: Chrystia Freeland-Facebook)

The COVID-19 PANDEMIC has created a huge government debt. There are traditional ways of dealing with debt: by slashing spending, raising taxes, or a combination of both.

Canadian Taxpayers Federation has raised alarm of a possible tax on the sale of homes. They point to a study by the Canadian Mortgage and Housing Corporation which spent $250,000 to investigate such a tax.

Fear not. Such a tax is not going to happen any time soon, if at all.

Canada’s finance minister, Chrystia Freeland, recently outlined her approach to debt and it will not be to raise taxes or cut programs. In fact, spending on programs to help Canadians get through the pandemic will increase. She said: “To ensure that our recovery is as broad, robust and complete as possible, we will need to build our way out of it.”

The new way of thinking of debt is called “modern monetary theory,” which posits that large deficits are not a bad thing as long as inflation and borrowing rates are low.

I can remember the disastrous “bloodbath budgets” of Liberal Finance Minister Paul Martin in 1997. Martin warned that we were about to become a Third World country unless something drastic was done.

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David Charbonneau is a retired TRU electronics instructor who hosts a blog at http://www.eyeviewkamloops.wordpress.com.

About Mel Rothenburger (7841 Articles)
ArmchairMayor.ca is a forum about Kamloops and the world. It has more than one million views. Mel Rothenburger is the former Editor of The Daily News in Kamloops, B.C. (retiring in 2012), and past mayor of Kamloops (1999-2005). At ArmchairMayor.ca he is the publisher, editor, news editor, city editor, reporter, webmaster, and just about anything else you can think of. He is grateful for the contributions of several local columnists. This blog doesn't require a subscription but gratefully accepts donations to help defray costs.

1 Comment on CHARBONNEAU – Raising taxes not the way out of debt created by COVID-19

  1. Tax on the sales of homes should be for speculators only…I believe that’s what has been discussed. And that is not a bad thing.
    Strong economic recovery is directly proportional (perhaps not liner but close) to environmental degradation somewhere on earth…climate change is only part of that story.

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