HANNAFORD: A quarter-trillion more... Ottawa’s budget of deception

Well, they did tell us ahead of time. The Liberals said they would borrow big. And today, they kept their promise.In April of this year, the CBC reported that if elected, the Liberals would continue governing with borrowed money. They were quite specific: “Liberal Leader Mark Carney announced... his election platform includes $130 billion in new measures over the next four years that, when combined with existing spending, will add $225 billion to the federal debt.”Canadians voted for them, in central Canada, anyway. But, fast forward to today, and Finance Minister François-Philippe Champagne promises, in this fiscal year alone, a deficit of $78.3 billion — and over the next four years, more borrowing totalling $186.9 billion, for a grand total of $265 billion.Close enough. Canadians got what they voted for. .Should one be impressed that Prime Minister Carney understood the terrible state into which his financially illiterate predecessor had landed the country, and knew he would need to borrow a quarter of a trillion dollars? Perhaps. After all, he had been at Justin Trudeau’s right hand for years before the former was chased out of office by his own party.Or should one, rather, be preparing to switch now into hard assets before inflation takes off again? There are people far better qualified than myself to adjudicate that question — but as the federal share of the national debt is set to grow from $1.2 trillion today to $1.5 trillion within a few years, dealing with inflation remains the question for ordinary Canadians struggling to get by..Governments have only three choices: raise taxes, cut expenses, or let inflation rip and pay off debt in inflated dollars.In this budget, I see no new broad-based tax rate increases on personal income, corporate income, GST/HST, or capital gains.But neither has the Liberal government cut spending; on the contrary, this so-called “generational investment” — a phrase surely coined in the PMO communications shop rather than at the Department of Finance — simply rebrands more spending as nation-building. Forget all the propaganda about “spending less to invest more.” The government’s own tables tell the story: spending will rise from $581 billion this fiscal year to $644 billion within five years.Check out the bolded figures in the table below..That leaves devaluing the currency even more as the only way for this government — or any future government — to get by.This is not a good budget. What makes a country rich is private investment. What makes it poor, is taxpayer-funded spending marketed by politicians as investment — 'generational investment,' in this case — and directed by civil servants who are not bound by personal risk to their decisions..It is, of course, the government’s prerogative to tell its story the way it works best for them.However, when the messaging bears so little resemblance to fiscal reality, Canadians are entitled to call it what it is — deception by design. The talk of “investing in ourselves” and “charting a new course for Canada’s future” sounds uplifting, but it conceals a basic economic fact that no amount of political spin can change: Canada’s prosperity remains overwhelmingly dependent on trade with the United States, which accounts for roughly 70% of our exports.That being the case, it is simply not credible to pretend that Ottawa can borrow and spend its way to economic independence. No “generational investment” can change the structural reality of our economy — not in this decade, anyway — nor the burden that a $1.5 trillion federal debt (and rising) will place on Canadians for generations to come.The Liberal government’s story may be one of transformation and renewal. The numbers tell a much plainer truth: this is not a reinvention of Canada’s economy, only a rebranding of reckless borrowing.

HANNAFORD: A quarter-trillion more... Ottawa’s budget of deception

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