In their 2015 campaign for re-election, the Harper Conservatives proudly announced a no-deficit budget after years of working to rebalance spending and revenues following large stimulus deficits necessitated by the 2008 global economic crisis. Justin Trudeau’s Liberals, behind in the polls when the writ was dropped, proposed “modest” deficit spending totalling $25 billion in the first three years, returning to a balanced budget in the fourth. Although this was seen as a risky strategy, the Liberals were rewarded with a decisive majority.

That $25 billion promise has ballooned to nearly $70 billion in actual deficits over four years. And Trudeau’s promise of a balanced budget has been replaced by a planned total of $94 billion in federal deficits over the next four years. The NDP and Green election platforms proposed even higher spending. Despite these campaigns featuring such a staggering accretion of our national debt, pollsters found that deficit spending didn’t rank as a major election concern for most Canadians.

This also occurred despite the clear and responsible alternative offered by the Conservatives under Andrew Scheer. Striving to balance political reality against the dangers of driving the country ever-deeper into debt, they proposed a $25 billion deficit in the first year along with moderate fiscal tightening that would move Ottawa to a balanced budget in five years. The election results confirm that most Canadians have lost all fear of deficit spending, no matter how large.

Most economists believe that governments should constrain spending in good times to preserve financial capacity for stimulus spending during recessions. According to this recent report, Canadian economic growth is forecast to be 1.5 percent this year and 1.6 percent in 2020. That’s not great, but it’s still not in stimulus territory. Scheer’s plan to cut back gently was the correct one.

But instead of controlling spending during a robust economic period in Canada, the Liberals ran huge deficits in their first term and now, as a minority government, are planning to greatly increase deficit spending in their second. That leaves no financial room for a recession. Since the last recession was in 2009, for the Liberal plan to work would require at least 15 years without a recession, a most unlikely prospect

What would motivate the Liberals to risk putting Canadians in such economic peril? The answer is that government spending is being used to offset a dramatic loss of private-sector confidence. This November 2018 Fraser Institute report stated: “The federal government’s introduction of higher taxes, mounting debt and increased regulation has left Canada a much less attractive place to invest.” The results have been ominous, to say the least. “Crucially, Canadians have increasingly looked to other countries to invest, with the amount Canadians invest abroad rising 74 percent from 2013 to 2017,” the report warned. “At the same time…investment from other countries into Canada dropped a staggering 55.1 percent.” What this signifies is tens of billions of dollars in capital investments and tens of thousands of well-paying jobs – all of it now occurring in other countries.

Other credible economic organizations have similarly worrying findings. The World Bank’s most recent “Ease of Doing Business” analysis has Canada dropping from fourth place in 2006 to 22nd in 2019. That is four spots lower than Australia – and only three better than Azerbaijan! And a majority of respondents to a Business Council of Canada survey listed Canada’s “uncertainty and lack of predictability in regulatory processes” as negatives for investors. That was before last month’s election. The prospect of a profligate Liberal minority government dependent on the even-more financially destructive policy positions of the NDP or Bloc Québécois is enough to send still more investors scurrying to the exits or avoiding Canada to begin with.