A hike to the federal Goods and Services Tax may be looming as the Liberal government sinks Canada deeper into debt. The Canadian Taxpayers Federation says the Liberals have taken the federal deficit from $19 billion to $381 billion in just nine months. It means, in a few weeks, Canada’s total debt will sail past one trillion dollars.

A report from the C.D. Howe Institute says, a GST hike may be in the offing if Ottawa starts down the road of permanent post-pandemic spending increases. The report says if Canadians want an increase in the level of ongoing program spending post-pandemic, they must be aware that it will require an increase in taxes across the income spectrum.

The Fiscal and Tax Working Group that produced the report says, increasing the GST by two percentage points along with a 40 per cent increase in the GST tax credit would raise nearly $15 billion annually. The group says taxpayers and policymakers should not underestimate the scope of tax increases needed if Ottawa increases spending as much as envisioned in the federal Speech from the Throne.

The Taxpayers Federation says, Canada’s deficit has increased the most among its G7 peer countries and yet still has the highest unemployment rate. In fact the CTF says, it sent a whopping $54 billion out the door to compensate Canadians for $21 billion in lost income. The Federation says, helping people out is one thing, but piling up new debt to send people two dollars for every one dollar they’ve lost is a very expensive way to miss the target.

On top of that, the CTF says not all new government spending is even related to the pandemic. It says many of the Trudeau government’s recent announcements – from green infrastructure to child care – are simply repackaged versions of longstanding plans, trotted out under the pretext of “reinventing” the economy. The CTF wonders, if there wasn’t enough money to pay for these things when the deficit was only $19 billion, how on earth can there be enough now that it’s $381 billion?