Canada Should Be Spending $595 Billion More On Public Services Per Year
Conservatives often claim that Canadian governments “spend beyond their means” and, in so doing, accumulate large debts. They argue this is a bad thing, and the proper response is to spend less money.
The problem with this claim is that it’s difficult to know how much spending would constitute “too much.” To get an accurate view of this, we need to look at government spending as a percentage of the national GDP. This tells us how much we can afford to spend based on the size of our economy.
This data is available in the OECD’s Social Spending database, which compares spending across countries on “cash benefits, direct in-kind provision of goods and services, and tax breaks with social purposes.” These “benefits may be targeted at low-income households, the elderly, disabled, sick, unemployed, or young persons.”
With this data, we can generate the chart below illustrating Canada’s public spending as a share of GDP compared to other developed countries.
As you can see, Canada’s social spending as a share of GDP is well below the OECD average, and not even in the same ballpark as European countries with strong welfare states.
Canada’s GDP in 2016 was $1.53 trillion USD. That means our social spending totalled approximately $263.16 billion USD, or $341.55 billion CAD.
To match the OECD’s average level of social spending, we would have to spend just over $417 billion CAD per year.
And to reach the level of social spending enjoyed by the Scandinavian countries and some of their European neighbours (which is what we should be doing), Canada would have to spend around $595 billion CAD per year on public services — an increase of $253 billion CAD.
Conservatives would react with horror to this notion and deem it “fiscally irresponsible”, but the reality is that many countries spend far more on public services than Canada does and enjoy thriving, prosperous economies along with excellent public services. Canada could and should do the same.