It turns out, spend less to invest more means just one thing: spend more.
Finance Minister François-Philippe Champagne delivered the Carney government’s first budget last week, and the deficit is record-setting for a non-pandemic budget: $78.3 billion.
There is no plan to balance the budget or even to come close: within five years, the deficit will still be over $50 billion.
The Liberals have identified roughly $51.2 billion in spending cuts and other savings measures over the next five years, but this was more than offset by $141 billion in new spending.
As a household, if you’re looking to find savings and end up adding three times as much in new spending as you do in finding ways to save, that doesn’t qualify as spending less.
And it’s the same reality here.
There were real ways the government could have found clear savings in this year’s budget, but the feds decided to take the easy way out.
For example, some 40,000 government jobs will be eliminated over the next few years, but the plan is to do so through attrition and offered buyouts.
Given the fact that the number of federal employees exploded by over 100,000 during the Trudeau government’s 10 years in power, reducing the headcount by 40,000 gradually and through attrition simply doesn’t cut it.
Prime Minister Mark Carney repeatedly warned Canadians that austerity is coming. And yet his budget increases program spending by 7.2 per cent compared to last year. If that’s what Carney thinks austerity is, all of those diplomas he has aren’t worth the paper they’re written on.
While the budget does project program spending growth to drop to between 0.6 per cent and three per cent over the next number of years, government’s love to talk about future restraint until the future becomes the present.
If Carney was truly serious about spending restraint, he would have started going down that path now, not simply promising to do so in the future.
Carney repeatedly warned that spending increases in the last number of years of the Trudeau government, which were in and around seven per cent, had been reckless and unsustainable. And yet Carney’s own budget sticks with the Trudeau approach, at least for this year.
As Carney dithers, the interest on the national debt is also soaring.
Last year, interest on the public debt amounted to $53.4 billion, or roughly $1 billion per week. By 2029-30, interest will rise to a stunning $76.1 billion.
That’s far more than the federal government brings in through the GST, or what the federal government spends on healthcare transfers to the provinces.
Spending restraint needs to happen now. Budget deficits of $50 billion or more for the foreseeable future don’t count as restraint.
Whatever Carney’s rhetoric might be, he needs to be judged on the substance. And, when it comes to getting Canada’s finances back on track, Carney clearly failed to deliver.
Instead, what Canadians got is more of the same. This budget, while branded differently, could very well have been delivered by former prime minister Justin Trudeau’s government.
A spending increase of 7.2 per cent comes right out of the Trudeau playbook. Runaway deficits for years to come, a rising debt-to-GDP ratio, and soaring interest payments on the national debt are also familiar themes from the Trudeau years.
There was also nothing in the budget offering Canadians relief. With 50 per cent of Canadians saying they’re $200 away from not being able to pay their bills, taxpayers could have used some help. Instead, the government decided to spend more across the board.
Overall, last week’s budget from the Carney government was a big disappointment and represents more of the same. Time will tell if Canadians are willing to accept a government with different rhetoric but similar substance to one that was so unpopular when Trudeau finally exited the national stage.
Jay Goldberg is the Canadian Affairs Manager at the Consumer Choice Center. He previously served as the Ontario Director at the Canadian Taxpayers Federation and a policy fellow at the Munk School of Public Policy and Global Affairs. Jay holds a Ph.D. in Political Science from the University of Toronto.
