{"id":182745,"date":"2025-10-01T14:42:10","date_gmt":"2025-10-01T14:42:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/182745\/"},"modified":"2025-10-01T14:42:10","modified_gmt":"2025-10-01T14:42:10","slug":"business-council-warns-ottawa-against-growing-federal-debt-to-solve-canadas-investment-crisis","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/182745\/","title":{"rendered":"Business council warns Ottawa against growing federal debt to solve Canada\u2019s \u2018investment crisis\u2019"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Business Council of Canada CEO Goldy Hyder speaks at a conference in Ottawa last year. In a letter ahead of the fall federal budget, Hyder has urged Prime Minister Mark Carney to keep spending in check.Justin Tang\/The Canadian Press<\/p>\n

The Business Council of Canada says Canada is in an \u201cinvestment crisis\u201d but warns prosperity can\u2019t be achieved by taking on more debt.<\/p>\n

In a letter to Prime Minister Mark Carney<\/a>, the council\u2019s president and CEO Goldy Hyder said if the federal government intends on financing investment by incurring more debt, then it better have a plan to bring it down.<\/p>\n

\u201cWe recognize the difficult starting point and the need for upfront investments, but that should be underwritten by meaningful year-over-year reductions in the absolute deficit,\u201d Hyder wrote, saying at the very least the government should halve this year\u2019s deficit within three years.<\/p>\n

The council\u2019s submission is one of nearly one thousand the government received in recent weeks, ahead of the Liberals\u2019 budget tabling<\/a> on Nov. 4.<\/p>\n

A projection by the Interim Parliamentary Budget Officer last week warned the federal deficit could jump to $68.5-billion<\/a> this year, up from an estimated $51.7 billion last year.<\/p>\n

In his letter, Hyder urged Carney to keep spending in check.<\/p>\n

\u201cSpending control also means no new unfunded permanent programs. Any ongoing spending increase should be matched by permanent savings or an identified revenue source,\u201d Hyder wrote, noting the government should hold spending growth below nominal GDP growth.<\/p>\n

\u201cPriorities need to be traded off, not layered on top of each other.\u201d<\/p>\n

Ministers push for savings on federal contracts in letter to senior public servants<\/a><\/p>\n

Hyder also warned against the government\u2019s plan to split operating and capital budgets<\/a> \u2014 with the latter classified as anything which builds an asset, versus government salaries and social security payments, for example.<\/p>\n

The Liberal party election platform called for such a change, pitching it as a way to \u201ccreate a more transparent categorization of the expenditure that contributes to capital formation in Canada.\u201d It also said it\u2019s how other countries, like the United Kingdom, does it.<\/p>\n

In his letter, Hyder disagreed.<\/p>\n

\u201cExperts caution it is unnecessary and risks being used to relabel current spending as \u2018investment,\u2019\u201d he wrote.<\/p>\n

\u201cIf the government proceeds, it must be governed by clear, public definitions and an independent oversight mechanism to maintain credibility.\u201d<\/p>\n

Campbell Clark: There\u2019s no getting to the bottom of Finance Minister Champagne\u2019s budget mystery<\/a><\/p>\n

The council also conducted a survey over the last month and a half of its members, economists, policy experts and former senior officials. They almost unanimously agreed the government needs to have fiscal anchors in place to ensure political discipline and force trade-offs for new spending.<\/p>\n

A fiscal anchor is a guiding principle governments can point to in their budgets to show they\u2019re prudently managing public finances, particularly debt.<\/p>\n

\u201cBoth BCC members and experts reject simplistic rules, strongly favouring a dashboard approach that provides a complete view of fiscal health, rather than judging a budget based on one fiscal anchor,\u201d read a report on the survey.<\/p>\n

\u201cMembers strongly preferred a combination of rules rather than a single one based on any individual metric.\u201d<\/p>\n

Most respondents cited the need for a debt-to-GDP ratio that\u2019s either on a stable or declining path in the medium-term, while a vocal group stressed the need to keep debt-servicing costs in check. Others called for balanced budgets.<\/p>\n<\/p>\n

The previous Liberal government under former prime minister Justin Trudeau set an anchor of capping the annual deficit at one per cent of GDP and maintaining a declining debt-to-GDP ratio.<\/p>\n

The PBO report last week forecasted Ottawa will blow past those anchors in the upcoming budget, with an expectation the federal debt-to-GDP ratio will no longer decline in the coming years.<\/p>\n

Interim Parliamentary Budget Officer Jason Jacques told a parliamentary committee last week it was the first time in 30 years he has seen a projection where the key metric rises over time.<\/p>\n

The Liberal election platform promised to balance the operating budget by 2028, and ensure the government debt-to-GDP ratio declines over the budget horizon.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Business Council of Canada CEO Goldy Hyder speaks at a conference in Ottawa…\n","protected":false},"author":2,"featured_media":182746,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[901,888,902,879,877,903,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,44,912,907,911,905,908,882,898,899,714,897,906,865,61,900,892,886,883,913],"class_list":["post-182745","post","type-post","status-publish","format-standard","has-post-thumbnail","category-canada","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-ca","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-news","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/182745","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=182745"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/182745\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/182746"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=182745"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=182745"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=182745"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}