Prime Minister Trudeau now owns the two highest-spending years in Canadian history outside of war or recession
#LSN_Opinion Fraser Institute
THUNDER BAY, ONTARIO - January 27, 2019 (LSN) Prime Minister Justin Trudeau has now recorded two of the three years with the highest levels of per person government spending in Canadian history, which includes times of war and recession, finds a new study released today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.
“Wars and recessions clearly affect government spending, but to see this high level of peacetime spending when the economy is also growing could spell trouble for Canadian taxpayers in the future,” said Jason Clemens, executive vice-president of the Fraser Institute and co-author of Prime Ministers and Government Spending, 2019.
The study, which tracks annual per person program spending (adjusted for inflation) by prime ministers since Confederation, finds that spending this year ($8,639 per Canadian) is only $72 below the all-time record set by Prime Minister Stephen Harper in 2009 ($8,711 in 2018 dollars) during the global recession.
Consequently, two of the three highest-spending years on record—2017 and 2018 – are within Prime Minister Trudeau’s tenure.
In addition, Prime Minister Trudeau also presided over the fourth-largest average annual increase (3.1 per cent) in per person program spending since the Second World War, behind only Pierre Trudeau (4.5 per cent), Lester Pearson (5.3 per cent) and Louis St. Laurent (7.0 per cent).
Of the post-war prime ministers, only Joe Clark, Brian Mulroney and Jean Chrétien recorded average annual per person spending declines, though Clark was Prime Minister for less than a year. Notably, Prime Minister Chrétien reduced per person spending by 16.5 per cent between 1994 and 1996.
“The past few years have seen rapid and historic increases in deficit-financed government spending in Ottawa, at a time when the economy is growing,” Clemens said.
“Higher spending often leads to higher deficits and more debt that ultimately must be paid by taxpayers, which is why current spending levels represent a burden to current and future taxpayers.”
Summary
- This bulletin measures the level of per-person program spending undertaken annually by prime ministers, adjusting for inflation, since 1870. (The years from 1867 to 1869 were excluded due to a lack of inflation data).
- Per-person spending spiked during World War I under Prime Minister Sir Robert Borden but essentially returned to pre-war levels once the war ended. The same is not true of World War II when William Lyon Mackenzie King was prime minister. Per-person spending stabilized at a permanently higher level after the end of that war.
- The highest single year of per-person spending ($8,711) between 1870 and 2018 was under Prime Minister Harper in 2009 during the recession.
- Per-person spending in 2018 under Prime Minister Justin Trudeau is just $72 short of the all-time high recorded in 2009.
- Prime Minister Arthur Meighen (1920-1921) recorded the largest average annual decline in per-person spending (-23.1%). That decline, however, is largely explained by the rapid drop in expenditures following World War I.
- Among post-World War II prime ministers, Louis St. Laurent oversaw the largest annual average increase in per-person spending (7.0%), though this spending was partly influenced by the Korean War.
- Prime Minister Joe Clark holds the record for the largest average annual post-World War II decline in per-person spending (-4.8%), though his tenure was less than a year.
- Both Prime Ministers Brian Mulroney and Jean Chrétien recorded average annual per-person spending declines of 0.3%.
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