Trudeau is reversing Chrétien’s legacy by expanding the federal bureaucracy

Content of the article

Over the next weeks and months, there will be much discussion about Justin Trudeau’s legacy as prime minister. To provide some context, it’s worth comparing Trudeau’s fiscal record with another longtime Liberal prime minister — Jean Chrétien.

Content of the article

Content of the article

Content of the article

By the early 1990s, Canada’s federal finances were in shambles. Thanks to years of large budget deficits (and high interest rates), debt interest payments ate up a third of all federal revenue, and the country was on the brink of a full-blown fiscal crisis. Paul Martin, Chrétien’s finance minister, recognized the seriousness of the threat and famously promised to eliminate the deficit “come hell or high water.” And that is exactly what the Chrétien government did, thanks primarily to reductions in federal spending.

How did they do it?

The government launched a program review which examined all dimensions of spending in search of savings. The review led to a significant reduction in federal government employment, which fell by nearly 15%. While there were many components to the federal reforms of the 1990s, this reduction in the size of the federal bureaucracy clearly helped Chrétien and Martin eliminate the federal deficit.

Content of the article

Content of the article

Fast forward to today and Trudeau, who does not share his Liberal predecessors’ commitment to balanced budgets. Employment in the federal government has risen rapidly in recent years, with the Trudeau government adding more bureaucrats (in absolute and percentage terms) than were cut during the Chrétien/Martin reform.

RECOMMENDED VIDEO

We’re sorry, but this video could not be loaded.

Play video

From 2015/16 to 2022/23, federal government employment (measured in full-time equivalents) increased by 26.1%. In comparison, the Canadian population increased by 9.1% during the same period.

Just as the reduction in federal employment contributed to deficit reduction in the 1990s, the growth in federal employment has helped fuel the Trudeau government’s never-ending string of budget deficits since 2015/16. Incidentally, if the Trudeau government had simply kept the growth rate of federal employment to population growth during its nine years in power, federal spending would be $7.5 billion lower than it is today.

Content of the article

According to the Trudeau government’s latest projections, the federal deficit will reach $48.3 billion this fiscal year. And thanks to years of record spending under Trudeau, the total federal debt will eclipse $2.15 trillion. As a result, the federal government will spend $53.7 billion this year on debt interest payments — or $1,301 per year. Canadians.

Canadian history is clear – it is difficult to predict the political orientation of any premier or prime ministers based on their political streak. Prime Ministers Chrétien and Trudeau prove this. Chrétien reduced federal employment in order to eliminate the federal deficit. Trudeau reversed this legacy by rapidly growing the federal bureaucracy. This is an important reason for the divergent fiscal results between the two governments.

Under Chrétien, Canadians saw a series of balanced budgets. Under Trudeau, they saw an endless series of deficits and massive debt build-up that Canadians must pay for today and for many years to come.

Ben Eisen and Jake Fuss are analysts at the Fraser Institute

Content of the article