If the present Liberal administration stays in office, the Canadian economy is doomed. Their heavy spending habits, lack of restrictions on extracting natural resources, and backing of policies that inhibit development are all contributing elements to this gloomy forecast.
Spending Patterns of the Government
It is common practice for the Canadian government to spend more money than it receives in taxes. A decrease in economic efficiency may result from the resulting long-term debt problems. Prime Minister Justin Trudeau and the Liberal Party have carried on the Conservatives’ practice of increasing Canada’s foreign debt. However, in light of the current economic hardships caused by the coronavirus pandemic—which has led to a rise in unemployment as businesses close their doors and new regulations are put in place—it is understandable that their government has increased the overall size of the budget.
The lack of significant budget cutbacks and measures to balance the budget is the biggest issue with this administration. But instead, they show no signs of slowing down or stopping their annual debt pileup. Consumers and struggling companies in Canada suffer as a result of increased interest rates and inflationary pressures. Again, this is bad news for economic development since it reduces the amount of money that can be invested.
Management of Natural Resources
As of 2020, 9.1 percent of Canada’s gross domestic product will come from the country’s rich natural resource extraction industry. Having said that, Liberal policy on these resources is completely out of date. The government is quite sympathetic to the oil industry, which continues to get financial giveaways and is strongly in favour of oil-sands development.
This is likely the inverse of what may be considered a proper strategy. It would be more effective to encourage the development of renewable energy sources rather than provide incentives to the oil sector to do so. While Canada’s economy relies on and will continue to rely on natural resource exploitation, the country may and should pursue renewable energy sources rather than increasing its reliance on fossil fuels. If policymakers adopted a different tack, the oil industry’s negative impacts on bird habitats, air quality, and water contamination might be put an end.
Measures to Restrict Economic Expansion
Corporations and people alike must adhere to government budgetary laws if the economy is to thrive. On the other hand, the present Liberal administration is often said to have policies that hinder entrepreneurs’ ability to flourish and expand their firms.
Consider the present Liberal corporate tax: it has the potential to reach 53% if Canadian enterprises are subjected to the maximum rate of taxation. For both established and up-and-coming company heads, this may be a major turnoff when seeking funding. Some provinces and territories in Canada have raised income taxes, while others have increased capital gains taxes, eliminated tax relief programmes, and imposed higher personal tax rates.
Together, these regulations make it harder for people to save and invest, which in turn reduces Canada’s economic development potential.
In summary
As long as the Liberal Party is in power, the Canadian economy has a bleak future. The Canadian economy is in a worse condition than it ought to be due to the government’s extravagant spending, its inadequate regulations regarding the exploitation of natural resources, and the implementation of measures that discourage investment and development. If the Liberals stay in office for the next several years, Canadians should expect their economy to look quite different from how it is now.