𝓦𝓮 𝓝𝓮𝓮𝓭 𝓐 𝓢𝓾𝓻𝓿𝓲𝓿𝓪𝓵 𝓢𝓾𝓶𝓶𝓲𝓽
My first Survival Summit was held back in 1994 when Canada was struggling with a nasty recession and our country was fast tracking to hit the Debt Wall. By the final quarter of 1996 we hit that wall, with total government debt reaching an unsustainable high of 90.26% of GDP (gross domestic product or economic growth.)
We convened in a room at the King Edward Hotel in downtown Toronto, with the Canadian Taxpayers’ Federation (CTF) Debt Clock sitting in the lobby, reminding all of our dire fiscal situation. In our meeting room were brilliant minds from the CTF, the Canadian Federation of Independent Business, the Canadian Bankers’ Association, the Canadian and Ontario chambers of commerce, and, of course, editorial and management brass from the Toronto Sun, who sponsored this important gathering. We also brought in feisty Mississauga Mayor Hazel McCallion, and New Zealand’s then labour finance minister, Sir Roger Douglas, who steered his country off a collision course with debt.
Our group came up with Seven Summit Solutions. We then invited federal finance Minister Paul Martin to our second gathering to hear our solutions. At first, he rejected our ideas. But then, as Ottawa was preparing the 1996 budget, out of the blue I got a call from Liberal MP Dan McTeague who said Martin wanted to meet with me.
Behind closed doors, Martin revealed he was going to grant us our biggest wish. He would balance the budget and lower taxes, while weaning Canada off its insatiable appetite for debt. Martin, to this day, is my hero.
Fast forward to 2020, and the year of the Great Pandemic.
Unprecedented times take unprecedented measures. The world’s worst nightmare, a global COVID-19 pandemic, saw global leaders open up budgets and spend, spend, spend, to help families and businesses financially survive this crisis, as lockdowns gripped nations.
Here in Canada, the warnings began. Our national deficit for 2020-21, originally projected to be $34.4 billion, would jump to $343.2 billion – a level not seen since the Second World War. Ottawa’s net debt (combined annual deficits) would jump to $1.2 trillion, or 49% of GDP (gross domestic product or economic growth). But here’s what’s so scary. Total government debt is Canada, which includes the provinces, is projected to hit 97% of GDP by the end of this year – a level higher than our 1990s crisis. That’s $24,464 owed by each Canadian. And that debt takes a whopping $75 million a day in interest payments.
Yes, the landscape has changed from our 1990s crisis, compared to today’s crisis. The biggest is borrowing is so cheap, with the Bank of Canada rate hovering at a record low of 0.25%. That’s why our leaders are telling us, “don’t worry, be happy.” We will survive. But, what if rates rise? Then, there’s another crisis looming. Canadians, who were once savers, are now addicted to debt – owing a whopping $1.7 trillion. For every $1 we have in disposable income, we owe $1.77.
Canadians spend more than 45% of our income to pay taxes to all levels of government – many which are paid for in after income-tax dollars. Yet, the solution our leaders are looking at are higher taxes, including a new home equity tax on our principal residences – which for most of us is our biggest asset, especially in retirement. Believe me, Canadians cannot afford higher taxes.
As I said, unprecedented times, takes unprecedented measures, and leaders who will listen. So, I want to hear from you, and have your voice heard at our next Survival Summit. This is a time for brilliant minds. This is a time to have your voice heard.