LILLEY: Trudeau’s words on low interest rates come back to bite him

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Wednesday’s interest rate hike by the Bank of Canada is going to hit homeowners with a mortgage, anyone with a line of credit and … taxpayers.

That’s right, Canada’s payments on the national debt have gone up dramatically over the past several years and this latest interest rate hike will only make things worse.

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It’s not just that the Trudeau government has jacked up spending and the national debt dramatically since taking office, it’s also that interest rates have risen substantially in that time.

It was just three years ago that Trudeau was being asked about the cost of carrying all that extra debt when the PM interrupted the reporter, CTV’s Glen McGregor, to chastise him about how low interest rates were.

“Interest rates are at historic lows Glen,” Trudeau said smiling smugly at the camera.

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That was then, this is now, and interest rates are much higher.

In June 2020, the Bank of Canada’s interest rate was 0.25% but this week, after the ninth interest rate hike it sits at 4.75% with a possible hike to 5% in July. That interest rate hike hasn’t just hit hardworking Canadians, it has hit the government’s books as well.

Since taking office, the Trudeau Liberals have increased spending by 55% from $317 billion in 2016 to $490 billion now. The federal deficit went from $29 billion then to $40 billion now and the debt has risen from $648 billion to $1.2 trillion.

And the cost to service the debt, it’s gone from $$25.7 billion in 2016 to $43.9 billion now, and that cost is only going to keep rising.

When Conservative Leader Pierre Poilievre called for the Trudeau government to rein in spending this week, to help slow the growth of inflation, Trudeau scoffed. He accused the Conservatives of not backing COVID supports for Canadians – a lie, they voted for them – or of wanting Canadians to go without key programs like dental care, the new national child care program or an expanded tool rebate for skilled trades.

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All of this is nonsense, these programs are not the cause of Trudeau’s massive spending increases, which banks and even former Liberal finance minister John Manley have said are contributing to inflation.

“This is a bit like driving your car with one foot on the gas and the other on the brake,” Manley said earlier this year, describing how the Bank of Canada was trying to lower inflation while the Trudeau government’s spending was increasing it.

The national budget is $173 billion higher than when the Trudeau Liberals first took office. That 55% increase is well above inflation and given that COVID spending is over, it has nothing to do with the pandemic.

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The much vaunted national child care program will only cost the federal treasury $5.6 billion this year while the dental program will cost just $2 billion and the tools program just $2 million. Yet the deficit will be $40 billion this year and we will pay $43.9 billion just in interest payments on the national debt going up to $46 billion next year.


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With what we are paying to service the debt, we could fund the national child care program eight times over or the dental care program 22 times over. We spend almost as much on interest payments on the debt as we do on the federal health transfer.

These debt payments, these deficits have all been driven by Trudeau’s needless inflationary spending. No one can argue government services are 55% better since he took office.

Trudeau could cut back on spending without hurting core services and that would help ease inflationary pressures and mean the Bank of Canada wasn’t taking on this fight alone. He won’t do that because for Trudeau, spending money is good in and of itself.

Even if it hurts Canadians by driving up inflation, driving up interest rates and driving up debt payments, which squeezes out services and all the while you still can’t get a passport.

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