Champagne continues to skirt questions on Liberals’ fiscal anchors

Finance Minister François-Philipe Champagne continued to dodge questions about whether the Liberals could point to any fiscal anchors that guided their decision-making when it came to federal spending

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Finance Minister François-Philipe Champagne continued to dodge questions about whether the Liberals could point to any fiscal anchors that guided their decision-making when it came to federal spending.

While testifying before the Standing Committee on Finance on Monday, Champagne was pressed on the issue, which the Liberals have come under fire for in recent months.

“Minister, what are your fiscal anchors?” asked Vice-Chair of the Committee and Conservative MP Jasraj Singh Hallan.

Champagne responded by saying that the Liberals were “very clear during the campaign” that the federal government intended to have the operating budget balanced within the next three years.

“That’s your fiscal anchor?” pressed Hallan.

“That is a fiscal anchor that we have been talking about,” responded Champagne.

The Liberals have yet to release a budget for this year, after failing to present one in the spring. The Carney government pushed the release of any figures to November.

Based on what numbers are available, the Parliamentary Budget Officer estimates that this government’s spending will far exceed that of Trudeau, according to the 2024 Fall Economic Statement.

While the Liberals had intended to increase the debt by $131 billion over the next four years, annual borrowing will amount to $255 billion over the same period.

Hallan then asked if there were any other fiscal anchors that the Carney government would be using to hold its spending accountable.

“We’ve said that there will be a declining deficit-to-GDP over the same period,” said Champagne.

Hallan cited the recent PBO report, which rebuked the Liberals’ claim that this would be possible, given the amount of spending that’s already been announced.

Champagne disagreed with the report’s findings, saying that previous PBOs viewed things differently. He went on to say that “Canadians should rejoice” because the country has the “lowest debt-to-GDP ratio in the G7.”

“Your fiscal-to-GDP ratio was supposed to be one per cent; it’s doubled right now,” said Hallan. “You’re saying that it’s supposed to decline, but it doesn’t look like it’s going to decline. According to the PBO, you’re going to have 80 per cent higher deficits, and the economy is shrinking. So how do you square that?”

Champagne responded by saying that he perhaps had “more confidence in Canadians and the Canadian economy” than Hallan.

“Having the lowest debt-to-GDP ratio and the lowest deficit-to-GDP ratio in the G7, plus a triple-A credit rating,” said Champagne. “That’s a pretty enviable position.”

Hallan responded by saying that Canada currently has the fastest-shrinking economy in the G7.

“Saying that we have a triple-A credit rating is almost like a participation ribbon right now. Canadians waiting in food bank lines because they’re the ones suffering from your government’s spending. Again, you didn’t answer the question specifically. You’re claiming that the deficit-to-GDP ratio will be going down but there’s no specifics.”

Champagne replied by calling Hallan’s comments “offensive to Canadians.” However, Hallan said that his comments were based on the PBO’s latest report.

“Your ratio is ‘very alarming, stupifying, shocking and unsustainable.’ That’s what the PBO said. We agree. Canadians agree. Do you agree? Is the PBO lying?”

However, Champagne wouldn’t respond to the question directly.

According to the PBO’s latest report, interest charges on the debt alone will cost taxpayers over $55 billion this year.

“You guys are going to try the same failed experiment that Mark Carney advised the UK government on just last year,” said Hallan. “So are you going to be cooking the books? Trying to trick Canadians with these tricky accounting practices? Or both?”

Champagne didn’t answer; instead, he told the Chair of the committee, Liberal MP Karina Gould, that he found Hallan’s language and line of questioning to be “irresponsible.”