Kelly McParland: Debt? What debt? Canada's doing fine ... for now ... so don't worry

Finance Minister Bill Morneau delivers the fiscal update in Ottawa on Dec. 16, 2019.Blair Gable/Reuters

Clearly, for some, a larger debt does not cause economic anxiety. In fact, it has been said that Canada lives on a street where everyone is in debt.

Also, it is clear that the stock market has risen! Loan costs are low! Thus, it is clear that only a fool would not charge while he can.

It should be noted that even Canada does better than stingy Germans, supposedly known for their discipline. All this makes Bill Morefornow, who is in charge of Canada’s finances, feel quite good about himself. “Look!” He says when someone asks about Canada’s debt. “We’re not in such bad shape as these other guys!” Bill Morefornow has a half-full view of life full of glass. In fact, he doesn’t even like the idea that it’s only half full. I could borrow more money and fill it out tomorrow if I wanted to.

Why bother?

Interest rates are low, lenders are eager to lend. Morefornow does not like to discuss the possibility that rates increase or productivity decreases. That is for Debby Downers. There has not been a severe recession in 10 years, long before Morefornow moved into the neighborhood.

It is important to note that Bill Morefornow’s projections have deviated so much that he cannot even fulfill them for a few months. Just last March, he said he would borrow about $ 19.8 billion this year. On Monday it revealed that the number would actually be close to $ 27 billion.

Likewise, there is a small nuisance that Morefornow could have preferred to avoid. For years, he has been telling everyone that the only figure that counts is what is called “debt / GDP ratio.” 

Morefornow and his boss put many actions in the relationship. As long as they keep going down, they say, it really doesn’t matter how much they borrow. Even so, it will not go down this year. It will rise a little. However, once again, Morefornow is not worried, because he promises that it will be reduced in the future, just as he promised that the loans would be reduced in the future. And he promises he won’t break this promise the same way he broke the other promise.

When asked how he can be so sure about his plans, Morefornow says he talked to a group of economists, and they agreed that things are fine, for now. Of course, other economists are not so sure. Like others, he is concerned that Morefornow’s figures do not allow much great promise of expenses that his boss recently made. Nor do they allow any possibility that the costs of the loans will increase or that Mr. Orange Hair can trigger an international catastrophe, or one of those unpleasant recessions could appear even though everyone crosses their fingers.

Source: Kelly McParland | National Post