There are people among us who, assured of their impending death yet retaining some capacity for enjoyment, would run up their credit cards in a last orgy of excess and leave their unfortunate executors to clean up the mess.And then there is today's Liberal budget. Upon present indications, and barring events beyond my imagination that would save them, the party’s malign ten-year reign draws to a close in almost exactly 18 months. And so, the Trudeau Liberals decided to go for it and spend beyond their wildest dreams in an effort to do two things:1) Cover up eight and a half years of economic policy failures and2) Attempt to snatch back the housing issue from Pierre Poilievre, who for now, owns it.And so was born today’s budget. Of course, from a series of campaign-style announcements, we knew a lot of what was coming. Money — $6 billion — for the Housing Infrastructure Fund here, multiple stops pumping elevated carbon taxes there, there, there and there, a $15 billion ‘top-up’ to ‘turbo charge’ the soon-to-be $55 billion Apartment Construction Loan Program. Billions for defence. For a billion dollars more, a National School Food Program. A couple of billion to invest in AI. An unwise and doomed-to-failure tax on the rich, according to former Bank of Canada chairman David Dodge, who predicted this would be the ‘worst’ budget in 60 years. (How right he was.)Now we also know that they have promised nearly $53 billion in new spending over the next five years, some for housing and some to pour into promoting the manufacture of electric vehicles that nobody wants to buy and to finance it all through $40 billion dollar deficits stretching out into the future. The consequence of this will be that a massive $54.1 billion, or 10% of all government revenues, will go this year to debt servicing. In the years to come, that percentage will rise. Meanwhile, the legacy of eight years of Trudeaucracy is that Ottawa now spends more on debt servicing than health transfers. Nice going.Let's be very clear about the two things the Liberals are trying to cover up here. The first is that Canada has a housing crisis because first, their reckless borrowing during COVID-19 caused inflation, that was in turn met with higher interest rates that then made it more expensive to buy a house. Second, at a time when prices were rising anyway, the Liberals accelerated immigration, thereby in addition causing a supply shortage.Many of us have been inclined to blame all that goes wrong on economic illiteracy. This does indeed appear, along with a certificate of wokeness, to be a basic qualifier to run for the Liberals. However, the truth of the matter is that to avoid having to admit their mistakes when actual GDP growth had collapsed, the party used immigration to give the appearance of growth. How does that work? Let's face it, in the last few years, things have been a mess for Canada's banks. Between an inverted yield curve and government bonds going under water due to rising rates caused by excessive COVID-19 bond issuance, the banks were looking disaster in the face. All they needed was for real estate prices to fall as well and leave them with insufficient collateral to back the loans they'd made.They should therefore be grateful to the Trudeau Liberals, who unexpectedly expanded immigration and let in a couple of million people all needing a place to live. Ergo, up went property values and up went rents and all that propped up bank balance sheets. Did the prime minister know what he was doing? One wonders. But somebody did. To watch the prime minister out there on the stump now, promising massive amounts of money to solve a problem for which his government is responsible, is irksome for anybody who had hoped to buy a house this year but can't.And for Pierre Poilievre, it is doubly irksome as the finance minister now uses ideas he first proposed a year ago — the use of federal lands and building stock — to open up accommodation. Typically, they didn't think it was such a good idea when he had the patent for it.The problem with the Liberals is that they know only one solution for a problem — spend more money. (It's not as if more money produces more people who know how to build houses. It just makes the ones we have who are already as busy as they want to be, more expensive.) What they don't know, is how to avoid a problem in the first place. And that is how you get an abortion of a budget like this one.And so, the 'unfortunate executors' await the latest generation's call. In what is actually a Canadian tradition, just as Mulroney had to clean up after Trudeau senior and Harper after Martin, so Poilievre will have his hands full after October 2025, dealing with what's left after a prime minister is gone, who never cared to think about monetary policy.
There are people among us who, assured of their impending death yet retaining some capacity for enjoyment, would run up their credit cards in a last orgy of excess and leave their unfortunate executors to clean up the mess.And then there is today's Liberal budget. Upon present indications, and barring events beyond my imagination that would save them, the party’s malign ten-year reign draws to a close in almost exactly 18 months. And so, the Trudeau Liberals decided to go for it and spend beyond their wildest dreams in an effort to do two things:1) Cover up eight and a half years of economic policy failures and2) Attempt to snatch back the housing issue from Pierre Poilievre, who for now, owns it.And so was born today’s budget. Of course, from a series of campaign-style announcements, we knew a lot of what was coming. Money — $6 billion — for the Housing Infrastructure Fund here, multiple stops pumping elevated carbon taxes there, there, there and there, a $15 billion ‘top-up’ to ‘turbo charge’ the soon-to-be $55 billion Apartment Construction Loan Program. Billions for defence. For a billion dollars more, a National School Food Program. A couple of billion to invest in AI. An unwise and doomed-to-failure tax on the rich, according to former Bank of Canada chairman David Dodge, who predicted this would be the ‘worst’ budget in 60 years. (How right he was.)Now we also know that they have promised nearly $53 billion in new spending over the next five years, some for housing and some to pour into promoting the manufacture of electric vehicles that nobody wants to buy and to finance it all through $40 billion dollar deficits stretching out into the future. The consequence of this will be that a massive $54.1 billion, or 10% of all government revenues, will go this year to debt servicing. In the years to come, that percentage will rise. Meanwhile, the legacy of eight years of Trudeaucracy is that Ottawa now spends more on debt servicing than health transfers. Nice going.Let's be very clear about the two things the Liberals are trying to cover up here. The first is that Canada has a housing crisis because first, their reckless borrowing during COVID-19 caused inflation, that was in turn met with higher interest rates that then made it more expensive to buy a house. Second, at a time when prices were rising anyway, the Liberals accelerated immigration, thereby in addition causing a supply shortage.Many of us have been inclined to blame all that goes wrong on economic illiteracy. This does indeed appear, along with a certificate of wokeness, to be a basic qualifier to run for the Liberals. However, the truth of the matter is that to avoid having to admit their mistakes when actual GDP growth had collapsed, the party used immigration to give the appearance of growth. How does that work? Let's face it, in the last few years, things have been a mess for Canada's banks. Between an inverted yield curve and government bonds going under water due to rising rates caused by excessive COVID-19 bond issuance, the banks were looking disaster in the face. All they needed was for real estate prices to fall as well and leave them with insufficient collateral to back the loans they'd made.They should therefore be grateful to the Trudeau Liberals, who unexpectedly expanded immigration and let in a couple of million people all needing a place to live. Ergo, up went property values and up went rents and all that propped up bank balance sheets. Did the prime minister know what he was doing? One wonders. But somebody did. To watch the prime minister out there on the stump now, promising massive amounts of money to solve a problem for which his government is responsible, is irksome for anybody who had hoped to buy a house this year but can't.And for Pierre Poilievre, it is doubly irksome as the finance minister now uses ideas he first proposed a year ago — the use of federal lands and building stock — to open up accommodation. Typically, they didn't think it was such a good idea when he had the patent for it.The problem with the Liberals is that they know only one solution for a problem — spend more money. (It's not as if more money produces more people who know how to build houses. It just makes the ones we have who are already as busy as they want to be, more expensive.) What they don't know, is how to avoid a problem in the first place. And that is how you get an abortion of a budget like this one.And so, the 'unfortunate executors' await the latest generation's call. In what is actually a Canadian tradition, just as Mulroney had to clean up after Trudeau senior and Harper after Martin, so Poilievre will have his hands full after October 2025, dealing with what's left after a prime minister is gone, who never cared to think about monetary policy.
