APRIL BARTLETT/St. Albert Gazette

The federal government needs to tighten its belt instead of depending on a stable economy to balance its budget, said Brent Rathgeber, member of Parliament for Edmonton-St. Albert.

Rathgeber spoke Wednesday at a lunch hosted by the St. Albert and District Chamber of Commerce at the Sturgeon Valley Golf and Country Club.

“I am perplexed, genuinely perplexed, by the normalcy at which government at all levels, federal, provincial, sometimes municipal, routinely runs deficits large and small,” he said.

Rathgeber said the federal government collected $245 billion in revenue in the past year, and spend $240 billion on programming expenses.

That left a surplus of only $5 billion, while the national debt rose by another 26.2 billion, bringing the overall debt to just under $608 billion.

If interest rates on debt payments were to double because of an economic downturn, he said the rates would have a debilitating effect on the treasury and the government’s ability to deliver programs and services.

In order to pay down the debt faster, he suggested cuts to government spending.

“It is easy to defend or at least rationalize most government expenditures – transfers to persons for employment insurance, old age security, the Canada pension plan,” he said, adding to the list national defence and public safety, spending on employee skill training and transfers to the provinces for health and education.

He stressed, however, that the government is running a risk with investment into private industries, such as the $400 million going into the new Venture Capital Action Plan.

The plan will see the federal government partner with provincial governments and the private sector to invest in new or existing venture capital funds.

Rathgeber said if the investment was a sure bet for economic wealth creation, banks and businesses would be interested in sharing in the multiplied economic benefits.

“Remember that government does not create wealth and that all tax dollars are either collected from profitable enterprise or from the income tax from the employees of those enterprises,” he said.

“So should government allocate resources taken from successful enterprise to invest in potentially successful enterprise?”

In an era of scarce resources, with extreme public debt in the United States and some European countries, Rathgeber said the Canadian government should cut debt and control spending.

While there is never a good time to create austerity measures, he said it’s easier to do so when the economy is stable because weak economic times bring renewed calls for stimulus spending.