This week, Chrystia Freeland, Deputy Prime Minister and Minister of Finance will stand in her place in the House of Commons and present the Trudeau government’s budget for the next year. I can remember a time when there was strict control over budget preparation, and any leaks that came out of that process prior to Budget Day resulted in the resignation of the Minister of Finance.
Not so much anymore. In fact, this government has been intentionally leaking one new initiative after another for the past few weeks. All indications are that it will be a spending budget, one that you might expect immediately before an election rather than one barely into the second half of this government’s mandate.
It will almost be like Christmas in April; subsidized pharmacare, subsidized dental care, throwing money at housing conditional on the provinces jumping to the Fed’s tune, and on and on. The reality, however, is that there is no Santa Claus here. Every penny governments spend in one way or another comes out of the pockets of their citizens.
The Trudeau Liberals are not alone in this. In recent weeks, Premier Doug Ford’s Progressive Conservative government in Ontario tabled a budget projecting a whopping deficit of $9.8 billion in the coming fiscal year—a surprise coming from him.
As of last year, before any of the projected deficits in the 2024 budgets, Canada’s combined national/provincial debt was $2.1 trillion. This is not an imaginary figure that never really has to be paid back, although many would wish that were so. The annual interest alone on this debt reaches a level that even my calculator cannot compute!
I have long believed that government cannot be all things to all people. Doing so removes the incentive for individuals to strive for excellence. Where there is no reward, there is less incentive.
Governments did not invent the automobile, the airplane, medical achievements, or the internet (except in the mind of former U.S. Vice President Al Gore, who thinks he invented it). And the list goes on.
Governments, of course, have a critical role in ensuring our national safety, contributing to global affairs, building a strong economy, ensuring an adequate national infrastructure, protecting human rights, and helping those who, for one reason or another, cannot ultimately help themselves. But trying to be all things to all people is not what governments should do; when they try, they create uncontrollable debt.
To the degree that they are able, most people want to take responsibility for themselves and to make their own decisions without unnecessary government interference. That is my view, but I have recently concluded that I may be in the minority.
In a recent article in the Toronto Star, columnist Susan Delacourt said, “Like it or not, we live in a country now that expects government to spend its way out of problems (which I acknowledge has been taken to a high art by Trudeau’s Liberals and the pandemic).”
In this new age of populism, I wonder if we expect more from the government rather than less. Do we have an attitude that the more government can do for us, the less we have to do for ourselves? Or do we believe that temporary financially related measures taken by the government in times of crisis, such as the COVID-19 pandemic, should be made permanent?
The Federal Conservative Party still has a double-digit lead over the governing Liberals. But that lead has somewhat dropped as the Liberals have leaked out the goodies they plan to announce in their budget this week. It will be interesting to see if that trend continues as the Trudeau government attempts to buy back a competitive position in the polls.
Sadly, I believe that the last thing we will see in the budget tabled in the House of Commons this week is a decrease in spending. Yes, I expect there will be some politically astute cuts here and there, but I predict that the increase in new spending will far outweigh any reduction in the cost of government and certainly no reduction of the national debt.
I have heard from a number of people who believe governments, in general, are bloated, especially when it comes to spending, and that they all ought to be put on a diet. It is hard to disagree with that when one thinks of the future. And I am not sure that the Trudeau government gets it.
Too many families today are struggling to make ends meet. The apparent solution from Canada’s Finance Minister, Chrystia Freeland, as expressed recently, is for those people to cut out unneeded expenses such as paying for entertainment channels and other areas of enjoyment. Nothing there about cutting her own government expenses.
We live in a world full of uncertainties, with global power struggles that have not been seen since the Second World War. It is understandable that it is easy to ignore our country’s financial stability when so much more is going on to grab our attention. But the reality is that the overwhelming debt due to government spending that Canada faces is a threat, not only to this and future generations and their standard of living but also to our ability to have the resources required to address other serious issues at the global level such as climate change as well as potential threats to our democracy and sovereignty.
The bottom line is that government spending is bloated, and it is high time everyone was put on a strict diet.
Hugh Mackenzie
Hugh Mackenzie has held elected office as a trustee on the Muskoka Board of Education, a Huntsville councillor, a District councillor, and mayor of Huntsville. He has also served as chairman of the District of Muskoka and as chief of staff to former premier of Ontario, Frank Miller.
Hugh has also served on a number of provincial, federal and local boards, including chair of the Ontario Health Disciplines Board, vice-chair of the Ontario Family Health Network, vice-chair of the Ontario Election Finance Commission, and board member of Roy Thomson Hall, the National Theatre School of Canada, and the Anglican Church of Canada. Locally, he has served as president of the Huntsville Rotary Club, chair of Huntsville District Memorial Hospital, chair of the Huntsville Hospital Foundation, president of Huntsville Festival of the Arts, and board member of Community Living Huntsville.
In business, Hugh Mackenzie has a background in radio and newspaper publishing. He was also a founding partner and CEO of Enterprise Canada, a national public affairs and strategic communications firm established in 1986.
Currently, Hugh is president of C3 Digital Media Inc., the parent company of Doppler Online, and he enjoys writing commentary for Huntsville Doppler.
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Hugh MacKenzie: I like the piece, especially the bit “Where there is no reward, there is less incentive.” But does the reward have to be supplied by the government or can it be the satisfaction and gain from personal achievement? My Conservative ethic dictates that I should do my best to fend for myself. But today we are up to our knees in people who refuse to accept any responsibility for their own well being. Will this possible new PC government insist people begin to work and provide their own reward. I’ll applaud if they do! Think they would ever get re-elected if they do?
I’m not a Trudeau fan, but comments here on Doppler, yours included, blame him for everything from darkness to the wicked witch of the west. But Trudeau and the federal Liberals were the only ones to offer the people any financial respite or concern during Covid. Provincial governments turtled. It may have been too much and too uncontrolled, but it saved some families and some businesses. And we know there were some citizens and businesses who took the opportunity to abuse the offer. Will this pending PC government ride hell bent to punish the guilty? Think there will be any votes in that?
Trudeau has almost succeeded in getting our dirty oil to tide-water. The valve will turn on and the money will begin to roll in. I find that kind of a bitter pill; supplying the world with megatons of the dirty CO2 we are supposed to be trying to get rid of. Any PC plan here or would Alberta be offended? And PC votes dry up!
Will ‘Axe the Tax’ Pete dump the new pharma-care or dental care? Will votes disappear if these Lib/NDP treats disappear? Will Pierre nix the offer of federal money for provincial home building. Our western rose is getting a bit prickly over this and Ford seems to have his shovel stuck in the ground and can’t get it out.
As for government today being bloated. Right on! But Poilievre likely won’t be using our own Ford PCs as an acceptable template. We’re talking serious bloating here! More Queen’s Park politicos and bureaucrats earning far bigger wages than our previous Liberal underachievers. So no shining example there.
However, Doug did put his foot down when it came to paper bags for the LCBO. Once those bags are filled with hot air, they produce such a wonderful ‘Bang’ when you smack them.
I guess small things amuse……….
Let me clarify – under the data produced annually by the OECD, Canada’s productivity
GDP (gross domestic product)/hour worked, Canada is number 36 of the 47 nations that
the OEDC tracts. In other words, we are at the bottom tier of national productivity.
People may suggest that this does not matter but everything from attracting job growth
(companies building plants and creating jobs in Canada), Canada’s relative value in the currency markets and the relevance of Canada as a country are impacted by many stat’s that over the past twenty years have been systematically been declining over the decades.
Perhaps the largest question that is no longer asked in most recent political discourse, is “What is the role of government”. Indeed, historically the answer to that question has defined conservatism, liberalism; socialism, communism etc.
From that perspective, I will offer my take on the “surging debt” conversation.
First, it should be noted that according to the World Economic Journal (2024), Canada has a public debt to GDP ratio of 96%. That places it 7th in the world in Public Debt to GDP. However it is worth noting (for my thesis) that the WEJ lists the US at 5th in the world with a Public Debt to GDP of 115%. It is this comparison that is most relevant to Canadians (I presume).
We know where the US spends its money. While 65% goes to mandatory spending (Social Security; Medicare; and Medicaid), half of what is left is spent on the military (or 12% of the total expenditures).
In Canada, approximately 60.4% of its expenditures are statutory for transfers to the Provinces and individuals (OAS, Disability etc). The military gets about 6% of total expenditures.
In a seminal publication by the Bank of Canada in July 2022 (Income Inequality in Canada), the Bank shows that over the past 40 years the lowest 25% of earners have not kept up with inflation. The top 5% of earners in Canada are up 35% over inflation (and the top 1% has doubled their inflation adjusted income).
So to repeat the current neo-conservative refrain (Ford, Polieve, Hugh Mackenzie etc), Canadians are hurting ….but certainly not all Canadians. If you are in the top 50% of Canadian earners, you are NOT suffering but for your exaggerated desires. It is ONLY the lower half of Canadian earners that are housing and food insecure….and whatever else is considered “suffering” to the new neo-cons. (It is worth noting that the income inequality in the US has vastly out paced Canada; especially in the past 10 years….Bank of Canada)
I look then at the list of programmes that Mr MacKenzie is grousing about and I see one thing in common….they all serve to raise the lot of the bottom half of Canadian earners.
Label me anyway you wish. But this, I believe is exactly the role of government. And if a country is going to sink under the load of debt (not likely …see the Marshall Plan), I would rather it be as a result of saving the most vulnerable, than building a war machine.
This is certainly an interesting discussion. I agree we are spending beyond our budgets BUT I have not heard one politician make any viable suggestion.
“Great to axe the Tax”BUT what else is he going to AXE If you decease the income you better decease the expenses.
I am still waiting to hear some positive plans to address Climate Change – perhaps the biggest threat to our grandchildren –
I have heard some ideas about helping those who need help but once again no action It is being left to so many organizations locally to raise funds and provide services Thanks to Food Banks – Soup Kitchens – Churches for providing lunches – many groups providing physical and mental health resources
Ahhh… life here in Canada. The accounts are all in the red, the Trudeau face is in the black. Nuthin to do but just open another beer and laugh, to keep from crying
We need more then anything a government that practices tight fiscal management, at a time when people can’t afford even the basics like food and housing .
Trudeau and his sidekick have no idea what that even means , and keep handing out money like drunken sailors.
I worry about the future of my children and grandchildren, stop spending money now and stop raising taxes .
Like all countries, Canada has some room for improvement, but Canada continues to fare well on all international comparisons. Saving is good but we can’t save our way to prosperity. Productivity is largely dependent on making the right investments. History has shown over and over that with responsible progressive policies, people can lift themselves out of poverty when those who can well afford it step up and help a bit more. Regressive policies protect the top 10% at the expense of everyone else. That is what happened in the once-dominant Roman and British Empires and now the USA.
In a modern, relatively wealthy country, there is no excuse for kids going to school hungry. There is no doubt that the Liberal’s budget proposals will give a hand up to many that need it, especially our younger people. Those investment will improve our national productivity, and yes it might require those who can well afford it, to temporarily help a bit more.
However, Poilievre’s dictatorial nature and populist attacks on “so-called” experts in every field (global climate, medical, and economic scientists, the Bank of Canada, the CBC) would create permanent and irreversible damage to the global environment, and to Canada’s health and reputation. Poilievre is still a young man, but you can bet that when he needs serious medical attention, he will go to those “so-called” experts he so recklessly vows to fire.
The Liberals built the Trans Mountain oil pipeline and supported the Coastal Gas Link pipeline. The Transmountain is set to start shipping oil on May 1, and the Coastal Gas Link will start shortly after. Those two investments will boost Canada’s productivity, improve the price for our oil and gas, boost our GDP by over $20 billion annually, help our trading partners to replace Russian oil and gas until global demand peaks in the mid 2030s, and help to fund some of the needed investments in health care and housing.
Well presented commentary Hugh. There certainly was a case to be made for excessive spending by the federal and provincial governments during a crisis such as during the Covid pandemic but what is going on over these past several years is just politically motivated spending. The recklessness of the Trudeau government’s ability to have a disciplined spending strategy and wildly spending to garner a better poll position for their next election illustrates how out of touch they are to manage & guide Canada’s economic future.
For those of us who are significant investors in the markets, Canada is no longer a viable place to put capital. A combination of too much government excess, the low level of national productivity and never ending rise in taxation makes Canada not an envious place for future generations. Change will not come until all governments dedicate themselves to tackle the crushing debt and laissez faire mentality which is so evident including Huntsville Council’s ridiculous tax increase as announced several weeks ago.
Yes. We all need to be on a money diet. That includes the wealthy corporations and shareholders who are amassing fortunes. The only way for that to happen is for government to take their fair share from them and distribute it. I’m not a populist at all.
Excellence for all….well, it’s a lot easier to get to the top of the hill when you start 3/4 of the way up. It’s a little tougher for the rest of us.