Under Trudeau, taxes and expenditures have barely budged
Over the past few years, there has been a great deal of consternation about the Trudeau government’s apparent increases in taxes and expenditures. This is not accurate. The Trudeau Liberals have essentially maintained the Harper government’s fiscal policy.
Canadian government spending as % GDP
Canadian government taxation as % GDP
Absent the coronavirus, which is estimated to spike total government expenditures by around 15% of GDP for 2020 (in line with the United States, Australia, and other low-tax western countries), Canada has had a very steady and relatively low level of taxing and spending in recent history. Much of this is categorized under the provinces, but provincial fiscal policy is largely set by the federal government.
From 2015 (the last year of Conservative majority government) to 2018, spending increased by 0.7% GDP and tax increased by 0.4% GDP. These are not especially significant fluctuations and are essentially indistinguishable from year-to-year variations in government finances absent significant policy changes.
There have been notable increases in child benefits over this period, specifically with the introduction of the the Canada Child Benefit (spending on family benefits increased from 1.2% GDP in 2011 to 1.6% GDP in 2018), but there is little else to note.
Relative to western Europe and Scandinavia, Canada’s fiscal policy continues to look remarkably conservative.
Government spending as % GDP, 2018
Government taxation as % GDP, 2018
Canada is well behind the comparatively high tax and high spending governments of Europe. In order to reach them (and their attendant increases in welfare spending and quality of life for lower income people), Canada would need serious increases in taxation.
Unfortunately, this does not seem to be on the political radar of Canada’s only left-of-centre party to ever form federal government.