The Canadian Taxpayers Federation calls this week’s federal budget “a complete dumpster fire” and a “disaster” for those concerned about rising debt.

Federal director Franco Terrazzano says interest on the $1.2-trillion debt is now costing taxpayers more than $1 billion every week and even exceeds federal spending on health care.

He says the $54 billion in interest charges equates to the revenue collected through GST.

“Every penny that you now pay in the federal sales tax is going just to pay interest on the federal credit card,” says Terrazzano.

In the meantime, he says the level of government spending will create a negative impact on inflation.

“Government is pouring gasoline on the inflation fire,” he says. “Canadians are struggling right now with the high cost of living, people are worried that their interest payments, their mortgage payments, are going through the roof, and the government is making the situation even worse by going on this debt-fuelled spending spree.”

Meanwhile, financial advisor Larry Short says spending itself doesn’t have an immediate impact on inflation, but it could have an impact in the longer term.

“During the first eight months of COVID,” says Short, “the federal government spent $240 billion, so that’s where you get a real jump in the inflation.”

Short says the federal government appears to be adopting the so-called modern monetary theory in its fiscal approach.

“According to that theory, growing the deficit at a slower rate than economic growth, ‘you can borrow forever,’ whereas ‘small C’ conservatives consider it ‘the magic money tree,’ which is you never have to pay down the deficit until something happens.”