I buy gas from Canadian distributors such as Saint John, N.B., based Irving Oil, local Esso stations owned by Wilson Fuels from Truro, or Petro Canada, a division of Suncor which employs many Maritimers in its Alberta oil sands operations. All three of these companies have been active in their communities during COVID-19 supporting food banks and those less fortunate.
Petro Canada just announced a fund empowering their associates with a $3 million investment that enables them to support communities during these challenging times. Their associates will thank Canadians doing essential work through small acts of kindness.
From fuel discounts to meals and other small tokens of appreciation for their customers, these gestures are Petro Canada’s way of saying “thank you” to all Canadians who are doing their part during this challenging time.
Despite our current federal government not being friendly to the Canadian energy sector, these companies continue to show they are truly Canadian and care about our country’s future. I have not seen a single dollar of support made to any community in Canada by self-interest groups like Green Peace, Sierra Club or Suzuki Foundation during the COVID-19 crisis. A crisis brings out Canada’s true friends.
It seems almost every week we are witnessing new financial supports being announced by our federal and provincial governments. Most developed countries around the globe are doing the same to stabilize their economies and help workers and businesses weather the COVID-19 storm.
Commerce is what drives Canada’s economy. Commerce generates the tax revenue governments use to run our country. Small businesses are our country’s economic engine. We should be doing all we can to preserve these entrepreneurs. These new funding programs are essential during our national time of need.
Unfortunately, our current federal government has been recklessly running consecutive annual budget deficits ($20 billion alone in 2019) since it took power in 2015. They have ignored warnings from many Canadian economists about running budget deficits during good economic times simply to win favor with the electorate. This year’s record deficit spending to stabilize our economy during COVID-19 will alone top over $200 billion dollars.
There will be no free lunch for the taxpayer
Federal Minister of Finance Bill Morneau has always sidestepped the question of budget deficits saying that Canada’s federal debt to GDP ratio was in the 35 per cent range which he touts is envied by other G7 nations.
But when you add in the provincial debt across the country (think Newfoundland and New Brunswick near bankruptcy) and then add another $200 billion budget spend from COVID-19 on top of that, Canadian debt is approaching 100 per cent of GDP (a staggering $1.7 trillion) which is worrisome. Our debt to GDP ratio is not far behind the USA where record debt is now approaching an astronomical 120 per cent of GDP.
Canada’s debt is headed for a crisis. Squandering our tax dollars in good economic times will come back to haunt taxpayers at the worst of times.
Sir Robert Borden, Liberal prime minister of Canada, introduced the federal income tax on business profits in 1916 and a tax on personal income in 1917. Both taxes were tabled as temporary measures to finance the First World War. Both those temporary federal taxes remain in place over 100 years later.
Already politicians like Halifax Mayor Mike Savage are behind the scenes urging Nova Scotia Premier Stephen McNeil to pressure the federal government to increase the excise tax on gas which Ottawa shares with municipalities. No doubt HST increases are under consideration as well. There will be no free lunch for the taxpayer.
Is there another way to balance federal finances and wrestle Canada’s debt to the ground? Of course there is!
Currently, the Bank of Canada like many other central banks around the world has lowered prime lending rates to 0.25 percent. It is cheap to borrow money today and Canada currently has a good credit rating with world financial institutions.
Canada’s GDP has the potential to grow at 3 per cent annually but only if the federal government becomes more business friendly and loosens the extreme regulatory harness it has around the nation’s business sector. Investors are currently leaving our country in droves.
If interest rates remain low and we can grow the economy at 3 per cent annually with debt financing at 0.25 per cent, then we will be able to manage and retire the national debt through our own prosperity.
Burdening the taxpayer with false promises of new “temporary taxes” does not have to be the solution to debt reduction for a federal government demonstrating sound leadership.
But it concerns me having Catherine McKenna, former federal environment minister now in the role of federal minister of infrastructure. During her term as environment minister, many project investors walked away from Canada due to an unreasonable regulatory atmosphere fostered under her ministry. Will any infrastructure funding post-COVID-19 be directed to stimulate our energy sector, an engine of our economy representing 20 per cent of Canada’s GDP?
Unleashing the full potential of Canada’s private sector will grow our economy, attract new investment, pay down the national debt, eliminate the need for new taxes, create badly needed jobs and make for a quick economic recovery.
Where is common sense among politicians when you need it most? Let’s unleash Canada’s full economic potential and flourish.
Adrian White is the CEO of NNF Inc., Business Consultants. He resides in Sydney and Baddeck. He can be reached at [email protected].
