Canadians need some relief, but the government has decided to keep making things worse.
For most Canadians, we are already in a recession.
Debt servicing costs are up, wages have been lagging inflation for a long-time, productivity is weak, and our per capita GDP is now in decline, having fallen back to about the same level it was a decade ago.
We have fallen far behind many comparable nations in terms of per capita GDP growth, with the government substituting massive population increase for per-person economic growth, which may make the overall GDP look larger but fails to translate into better living standards for Canadians.
Canada was ill-prepared for higher inflation, as our household debt levels were already elevated – much higher than in the United States – and our nation was already far too dependent on the housing market rather than real economic productivity.
So, as prices went higher and higher, and the Bank of Canada had to raise interest rates, Canadians were squeezed by both higher debt servicing costs and higher costs for everything else.
This didn’t have to be such a difficult situation if per capita economic growth was strong and if taxes were being cut.
After all, inflation is only a problem in a relative sense. If inflation goes up 5% and wages go up 10%, people are still better off. And if per capita income is surging due to rising productivity, higher prices and higher debt-levels can be more easily absorbed.
But that hasn’t been the case in Canada.
Wages have lagged inflation month after month after month.
And taxes have gone up, rather than down.
April Fools tax hike
So in a sad way, it’s perhaps fitting that the government is increasing the carbon tax on April Fools Day, since their economic policy is an absolute joke. Unfortunately, that joke is being played on Canadians like us.
The carbon tax will hit $65 per tonne April 1st, and will continue going up and up and up every year.
To say this is bad timing would be an understatement.
As Canadians struggle, the carbon tax will eat more out of people’s earnings, pushing prices up and disincentivizing business investment. At the same time, the population of the country will be increasing far faster than housing construction or social programs can handle.
The result is a slow but steady decline in our standard of living. And when the standard of living of a nation declines everything gets worse and worse. And isn’t that exactly how our country feels?
Canadians need to connect the dots, and realize that there’s no way we can get our country back on track until the Liberals are defeated. The damage caused by a destructive government and the pain felt by each Citizen in a declining nation is no laughing matter.