David Rosenberg: Canada was once productive and competitive, but not today
I have to say that watching the recent fiasco in the House of Commons with respect to the subtle (maybe not too subtle) shift in Mideast policy makes it embarrassing enough to be a Canadian, but the government’s mishandling of the economy and fiscal policy is beyond the pale — declining real per-capita incomes in Canada year in and year out.
If not for the tight trading ties with the United States and the good fortune of a rich endowment of resources, the Canadian economy would be in perennial recession.
There has been no capital deepening or productivity growth in Canada in eons because the massive spending at the government level has continued to crowd out private-sector investment. All the spending that was used to combat the pandemic has become a permanent feature of the budgetary landscape. The level of program spending in Ottawa today is 35 per cent higher than it was pre-COVID-19. Meanwhile, volume spending on aggregate business investment is lower today than it was in 2012. How can the citizenry be OK with that?
On a per-capita basis, government program spending is 27 per cent higher than it was in 2019 and almost double the average of the past 40 years. Inflation has only accounted for 40 per cent of that gap in per-person spending now compared to four years ago. The fiscal spending is out of control, and a clear sign is that when it comes to the government sector, what is always billed as a temporary spending measure to fight a crisis inevitably finds a way to remain on the books.
Either Canadians don’t know about what is going on with this fiscal profligacy or, as is typical in this country, totally apathetic to what is going on. The government incursion into the economy in this country is so acute that the
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