We're not hitting the 2% target on NATO. We're not even close. We're about 1% of the target. We're dropping.
So the issue going forward is, in a more unstable world, with not only what Russia is doing but potential aggression from China, we have to be investing more and more in our defence spending if we're going to be a defender of democracy around the world.
Now $50 billion in interest, in that context, is actually $10 billion more than we spend on our entire defence policy, it's $10 billion more than we spend on national defence. There are a lot of better things we could be doing with that interest rate than giving it to bankers in Canada, taxpayer money, rather than doing this.
This is the legacy of the Trudeau family. Pierre Trudeau, when he was Prime Minister—and left office in 1984—had accumulated $468 billion of national debt. It seems small, but that's on a budget of about $95 billion a year. The deficit that he left was 8.9% of GDP; in other words, that would be like $157 billion today.
Liberals are projecting inflation to be at 3.5% this year. Right now it's at a little over 5%. The Bank of Canada is saying interest rates are likely to be 6.2% by next year. So the Liberal projections on interest rates, obviously, are way off in this budget. In order for the government to meet this 3.5% target by July, which is only a few weeks away, interest rates...or inflation is going to have drop. Sorry, I shouldn't say “interest rates”, inflation will drop to 3.5%. In order for that to happen, inflation has to drop to 2% by July in order to get 3.5% for the year. That's not likely to happen. We're tracking at a little over 5%.
The $3.1 trillion in spending adds gasoline to the fire of inflation that we have. It's likely to be inflationary, as is Joe Biden's oxymoronically named Inflation Reduction Act, where actually the U.S. government is spending a trillion dollars. That's actually inflationary and not inflation reduction, but apparently Democrats need a lesson in basic economics and math as well.
Guess how much federal spending was in the last year of the Harper government?