Jayson Lowe breaks down how Canada's federal debt grew from $1 trillion to $1.6 trillion in seven years, tracing spending on items like an $8.6M residence renovation and WE Charity payments. He argues the debt-funded spending and money-printing fueled inflation that eroded purchasing power for ordinary Canadians.
Revenues $316.4 billion; Expenses $628.9 billion; Loss $327.7 billion
Population 38.7 million; estimated 30 million working adults
Average salary $50,000; taxes on that income $10,500 (implying $315 billion total from 30M workers)
Chapters
And I have even more bad news for you. Unfortunately, all of us here are the business owners.
We are the ones who are providing the revenues to the system.
But this management spends your money without any approval from you, the business owner. And in any normal business, this would never be allowed to happen. But this management team spends more than they collect from revenues. And even worse, they go into more debt. You may be wondering, who is this management team? Your management team produced these results for you. Where in 2014-2015, you'll see the revenues as 282.3 and expenses as 280.4 with a profit of 1.9. Since the revenues exceed the expenses now, a decision was made to change the management team. In 2015 to 2016, where revenues were now 295.5, expenses 296.4 with a loss of 1. The next year, this management team decreased revenue to 293.5 and.
Increased expenses to 312.5 with a loss of $19.00. The year next, revenues have increased to 313.6 with expenses 332.6 and a loss of $19.00.
Now, in 2018 to 2019, revenues went to 332.7 and expenses were 337.8 with a loss of 14.
And now 2019 to 2020, revenues are 334.1 and expenses were 362.9 with a loss of 39.4. So at this point, for five years, this management team has lost more money than they've made. Did the management team do a great job improving your business from a profitability standpoint? I think we would all agree that that would be a no. Now let's look at the most recent year of 2020 to 2021. Revenues are 316.4 and.
Expenses were 628.9 with a significant loss of 327.7. Well, where is this money coming from? When you have all of this debt or loss, where is this all going to accumulate? It's going to accumulate in the form of debt. So how would you feel about this if this was your business?
I have some really bad news for you. These numbers that I just went through, they are all real. Using 20, 20, 21 as the basis point for you to see. What you see here is not a couple hundred of dollars, a couple thousand of dollars, a couple million of dollars. It's billions of dollars. And just in case you're wondering, when you're looking at that debt number, this is $1.6 trillion. And I have even more bad news for you. Unfortunately, all of us here are the business owners.
We are the ones who are providing the revenues to the system.
But this management spends your money without any approval from you, the business owner. And in any normal business, this would never be allowed to happen. But this management team spends more than they collect from revenues. And even worse, they go into more debt. You may be wondering, who is this management team? It's the Canadian Liberal government. Now, how serious is this situation? What I did was I just put together the last seven years of financial statements from the government of Canada. These are the audited financial statements. And let's look at it all together. In 2015-2016, when the Trudeau government took over from the Harper government, the Harper government left with a profit of $1.9 billion and a debt of $1 trillion. Just based on looking at the debt and the profit that was made, the amount of money, the amount of time that it would take to pay this back would be 538 years. Now, if we look at one generation, one generation is about 25 to 30 years. So I mean, this is still not great. That's about 18 generations from here. So if we look at this debt at $1 trillion and we look at where the last audited financial statements are, at $1.6 trillion, the debt has increased more than 60%. So almost double what it was seven years ago.
As you can see, they've been losing money every single year. And it begs the question, when will that debt be paid off? Who is going to pay for that debt? And I'm sure you guessed it, it's you and your future generations.
So let's do some simple math. I'm using 2020 and 2021 as the example again. In Canada, there are currently 38.7 million residents. And let's estimate 30 million are working adults. The average Canadian salary is $50,000. Taxes on that income will be 10,500. So by doing some very simple math, that's $315 billion in revenue. And if we look at the revenues that Canada has collected, that is $316.4 billion. So wouldn't you wonder where will they find the money to continue funding their expenses? Now, taxes apparently fund many valuable services for society that government claims you benefit from. That may be true. There's also quite a lot of spending that's not in your control and does not benefit you. Now, if we look at 2020-2021 for those of you that have forgotten we were in the midst of a global pandemic with the government locking people and businesses down. People were losing their jobs.
Well, if we look at the amount of expenses, $628.9 billion in that year, the Prime Minister decided to do spend $8.6 million in a renovation for his lakeside residence. Now, I don't know about you, but I'm sure you know that home prices have skyrocketed so much that the average home in Toronto is about $1 million. Canadians can't even afford a home today. Yet he spent $8.6 million of your money for his lakeside residence. Now, in case you also didn't know, in 2020, there was a very, very big scandal that happened. It was the WE Charity scandal where he sent $456 million to close family members for event appearances.
Even his NDP coalition partner, Jagmeet Singh had something to say about this. An MP blasts him for giving $200 million of a loan to a failing Casinorama operator. Now, you would think that all of your tax money that you are paying, it gets spent in Canada, right? Well, I hate to break it to you, you're wrong. In 2020, the Trudeau government sent $3 million to the World Economic Forum, which is headquartered in Davos, Switzerland. Not only that, he sent 1.576 billion to the United nations and international organization. Now, if we look at 2014 to 2015 with the profit of 1.9 billion, that is everything here is very close to that $1.9 billion. So he sent the full profit of 2014, 2015 in what I would say misused spending that Canadians did not benefit from. And that's the worst of it, right? Unfortunately not. Could they increase the cost of your borrowing by raising interest rates and putting putting more pressure on you?
They already did and they already are with 1.5% as of June 1, 2022. That means you're working more to pay for your home. And there's a projection that mortgage payments could jump by 45% by 2025-2026 from the bank of Canada. Could they weaken your purchasing power by using the bank of Canada as an ATM to print more money? Absolutely. During that time, the bank of Canada printed five times the amount of money during that lockdown period. How has that impacted you in your everyday life? Food is becoming unaffordable. As of April 2022, from CPI data from Statistics Canada, fresh fruit is up 10%. Rice is up 7.4%. And I'm, you know, as you can see who I am. I like to eat my rice. This time last year, Ontario average gas price was 1.3 a liter. Now it's 210.9 on average. 60% jump from the average last year. And the bank of Canada official says it should be accountable for the failure to check inflation. Now, I'm not sure what that means. What does being accountable for failure to check inflation even mean? Here's just another way to see how the value of your wealth has been eroded by the printing of money. The numbers in what you own didn't go down, its value went down. And another way you can probably look at it is the government has silently taxed your wealth through the back door by devaluing what you have. If the government prioritizes increasing revenue to recover from all of their spending and debt, what is most likely going to happen to the amount of taxes you will actually need to pay in the future? Which direction do you think taxes are going to go? Up? If it's going to go up? Down? If it's going to go down? Sideways, if it's not going to change? We all understand where we are in today's economic environment now with taxes likely going up. What's the general Canadian family burden when it comes to taxes? Well, in 2021, the Fraser Institute released a research report. They do this report every single year, and they look at the amount of income. The average Canadian family income is about $100,000. And what they found in that year is 36.4% of the earnings went to taxes. So $36,400 of the $100,000 went to taxes, whereas 35.4% or 35,400 of the income went to basic necessities. What's very alarming is the government now takes more of your income in the form of taxes than you need to spend while you are living. With 36.4, if not more, going to the government as payment for services that they provide to their citizens, you're allowed to wonder, is it actually worth it for you? So I want to just share with you. I think it's important for us to identify what the problem is.
