Bankers are usually thought of as skinflints, pinching every penny with a constant eye on the bottom line. The release of the federal Liberal platform last weekend showed that party leader Mark Carney – known as a banker therefore presumed to be careful with money – is nothing of the sort. Considering that most Canadians are well aware that the Canadian government under Trudeau spent our tax dollars lavishly and recklessly over the last decade, it was downright shocking to see that Carney plans to spend even more than Trudeau despite our national finances being in a perilous state.
Carney’s plan includes increasing Canada’s debt by $225 billion – almost a quarter of a trillion dollars – over the next four years. This amounts to about $100 billion more than even the Trudeau-led Liberals were planning to borrow according to last Fall’s Economic Statement. Carney once said the previous Liberal government was spending too much, but he seems to have changed his mind since then.
More financial sleight of hand in the Liberal platform involves dividing the overall budget into “operational” and “capital” spending, where the capital portion is supposed to be spent on assets such as infrastructure. Using this distinction, the Liberal plan claims it will balance the operational budget by 2028. This is misleading, however, as combined with the capital budget there is still a deficit of almost $50 billion. As borrowing will increase, so will interest payments on the debt, exceeding $50 billion annually. This is more than the federal government transfers to provinces for health care.
Governments have tried this gambit of separating operating from capital budgets previously, and it has always ended badly with spending being even worse than planned. What happens is governments usually can’t resist moving funds from one account to the other to make the overall financial picture look better. As well, what exactly qualifies as “capital” is poorly defined and usually ends up being whatever the government decides it should be. Someone who presents himself as a prudent banker should be ashamed of putting forward such a concept.
The Liberal platform also contains not a mention of oil, gas or LNG. It does mention hydrogen in Alberta and solar power in Saskatchewan – pipe dreams that will never replace fossil fuel energy with current technology, if ever. The former Liberal government’s propensity for spending big on “green” infrastructure will clearly continue if Liberals win this election, as will the imposition of such concepts as ESG (environmental, social and governance) and DEI (diversity, equity and inclusion) on the business community and other public and private institutions. The fact that ESG and DEI have failed miserably in other jurisdictions and are being dismantled in the US and elsewhere hasn’t lessened the Liberals’ zeal for these economy-destroying concepts.
The Conservative platform was also revealed this week. Although their spending growth forecasts are also large, they are considerably less than the Liberal plan and the deficit is intended to shrink but not disappear over the four-year forecast period. The Conservatives also intend to downsize the federal government by attrition, replacing two people for every three that leave. Considering the Trudeau Liberals drastically increased the federal headcount by over 40 per cent with no discernable improvement in government services, the Conservative plan seems too gradual to make a significant difference. At least it’s a start.
The most glaring difference between the Liberal and Conservative plans is Poilievre’s intention to unleash Canada’s natural resource wealth to boost economic growth. It is estimated that $670 billion dollars in foregone opportunity in the resource sector – notably oil and gas – took place over the last decade because of large energy projects cancelled by the Trudeau government. Global demand for these commodities has not abated – in fact is expected to increase in future – so other countries are providing what Canada has been deliberately prevented from doing. The resource sector is also one of the highest in terms of labour productivity in Canada, so hobbling these industries has been a major cause of Canada’s productivity crisis and decline in our standard of living. According to the Liberal platform, this negative trend will continue under a Carney government.
Another major difference between the two platforms is that the Liberals plan to increase economic growth by government subsidizing business to expand, whereas the Conservatives intend to reduce government obstacles to growth and let the private sector prevail. History has shown that the government-led economic development route always ends in disaster, whereas the private sector-led plan has a good track record of success.
The one thing neither the Liberal nor Conservative platforms take into account is the very real possibility of a recession in the next year. Many analysts are forecasting storm clouds on the economic horizon because of Trump’s tariffs and other factors such as the indebtedness of the developed world. If a global recession does occur, Canada’s prospects appear worse than most other countries as bad policies for the last decade have made our economy particularly weak and vulnerable.
As it stands, recent data from the International Monetary Fund and the Organization for Economic Co-operation and Development have Canada scraping the bottom of the barrel in terms of economic growth and GDP per capita for the next decade and beyond. The outcome of the upcoming election will be important indeed in determining whether that dire forecast becomes reality or whether Canadians will see the change they really need to get our country back on a positive track. Fingers crossed.
She has published numerous articles in journals, magazines & other media on issues such as free trade, finance, entrepreneurship & women business owners. Ms. Swift is a past President of the Empire Club of Canada, a former Director of the CD Howe Institute, the Canadian Youth Business Foundation, SOS Children’s Villages, past President of the International Small Business Congress and current Director of the Fraser Institute. She was cited in 2003 & 2012 as one of the most powerful women in Canada by the Women’s Executive Network & is a recipient of the Queen’s Silver & Gold Jubilee medals.
