Prime Minister Justin Trudeau is out to bribe voters with $100 billion of our own money in the next election by throwing cash at every voting bloc the Liberals believe they will need to recapture a majority government.
It’s no surprise. Finance Minister Chrystia Freeland said the Liberals would spend up to that amount over three years to promote economic recovery in her November economic statement.
On Monday, Canada’s first female finance minister in her first budget, simply filled in the names of who will be getting the cheques, including everyone from women, to subsidized childcare providers, green energy aficionados (can’t forget them!), Indigenous Canadians, visible minority groups, the unemployed, seniors, students, young families and big and small business.
Which would be great news if the government’s finances were in good shape, but they’re a train wreck.
What the Liberals are doing makes no economic sense in a budget it took them 25 months to the day to deliver since their last one — unlike every province and territory and every other G-7 country which all produced budgets last year.
By contrast, the Liberals cynically delayed this budget for two years — since long before the COVID-19 pandemic and recession began — so they could portray themselves as Lady Bountiful financed by massive debt leading into the next election that Canadians will have to pay for generations.
This is not a sexist shot at Freeland. By Lady Bountiful, I mean Trudeau.
What the Liberals are claiming to justify this makes no sense.
They are boasting that under their leadership Canada’s economy is recovering from the COVID-19 recession much faster than expected, while at the same time insisting the recovery is so fragile they need to spend another $100 billion over three years financed by more debt.
Simply put, they refuse to pick a lane while speaking out of both sides of their mouths.
When Freeland first outlined this strategy in November, independent, non-partisan parliamentary budget officer Yves Giroux warned the financial strategy the government was pursuing could result in too much government spending financed by debt too late to help economic recovery.
The result is that while the deficit for the fiscal year which ended on March 31 will be slightly less than the exaggerated one of $386.1 billion Freeland predicted in November (now projected at $354.2 billion), deficits in the coming years will be higher than Freeland projected at that time.
This fiscal year’s deficit is now pegged at $154.7 billion, up from the $121.2 billion Freeland predicted in November, with deficits in subsequent years also surpassing previous projections.
There’s no plan to return to a balanced budget, but that’s no surprise since Trudeau had already abandoned his 2015 election promise of three years of modest deficits followed by a balanced budget long before the pandemic hit, replacing it with deficits for decades to come.
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The Liberals say there’s no problem because of low-interest rates, which will allow them to maintain the government’s debt-to-GDP ratio at around 50% for the foreseeable future. A healthy debt-to-GDP ratio is 27%.
Freeland’s budget is a fiscal house of cards built on the very shaky assumption the government can borrow cheap money forever.
It would be wrong to say that all the spending in this budget is unjustified, but what it is fair to say is that most of it is about the Liberals buying the next election with our cash.