A day after we got to look under the hood of the Carney government came word of the first misstep. No budget.
“Colour me unimpressed,” said cowboy chief bank economist Derek Holt. “I still don’t like this one bit. Canadians have a right to know the state of the government’s finances—like how bad are they now—and the planned consequences to deficits and debt. Otherwise, it feels like Canadians basically wrote a blank cheque on April 28th when they granted a minority government to the Liberal Party.”
He’s right, of course. We need to know.
Yes, yadda, yadda, yadda, there’s a volatile and uncertain trade war going on. Planning is hard. Yeah, Parliament will not be sitting for long before a scheduled break, so little time for debate or amendments. And, yup, we don’t need a wild non-confidence budget vote right now followed by another election.
So, politically, no budget is the chicken thing to do. But it also may show Carney’s naivete. We need the shiny new PM to be decisive, show leadership and (mostly) break from the Trudeau past of spendy wokeness. Canadians supported this guy because he had the whiff of being a progressive conservative. So, act like it.
Now, do you recall December 16th?
That day then-finance minister Chrystia Freeland was to deliver her fall economic statement. That was the last fiscal and economic update Canadians heard, and it might as well have been a decade ago. Trudeau was still running in the next election. The Libs were at 16% in the polls. Trump had not yet taken office. PP was set to rule. There were no tariffs, retaliatory tariffs, reciprocal tariffs or sectoral tariffs. We had not yet heard of Liberation Day. Stock markets were ducky.
And yet, Canada’s finances were rough.
That morning Freeland capriciously, dramatically quit in a hissy fit designed to be the first of her moves to become the next PM by cutting Justin off at the knees. (She failed.) The economic statement was nonetheless tabled in Parliament, and gave us more reasons she was bailing.
The government had broken its pledge to keep the deficit (the amount it spends in a year more than it collects) below $40 billion. Oops – it came in at a massive $62 billion for the current fiscal year. The estimate for the next year was $48 billion – but that was before the tariffs, rising unemployment and the spectre of recession.
Despite that, the Trudeauites proposed another $23 billion in net-new measures, including a couple of billion to finance that Christmas GST holiday – which Freeland blasted as a political gimmick.
Well, it got worse. And still is. Deficits are added to the federal debt, which (as I write this) is $1.246 trillion and rising $4.557 million per hour. Despite Bank of Canada interest rates having plopped down from the 5% level as inflation eased, it still costs us a ton of money to finance this debt.
Debt service charges are almost $24 billion this year and will rise to $70 billion annually within four years. If the Carney team turns on the taps, it will be more. If a recession robs tax revenue, more again. If Trump tariffs our buns off, more.
That amount of money would eliminate the deficit, bolster healthcare, meet our NATO defence commitments and even pay Mr. Poilievre’s parliamentary pension.
This is why deficits matter and the budgets that track them, report them and tell you about them. “Parliament is the place to discuss, debate and pass a Budget in an open democracy,” Holt rightly says. Freeland should not have walked out hours before her report was due. Too much drama. Carney should not balk at fully informing the nation of our finances, rather than making us wait almost a year after the last reckoning.
Bad decision, Big Daddy. You’re still on a short leash.
About the picture: “This is Jonesy and Luna,” writes Ted in Albefrta, “watching anything but the news.”
To be in touch or send a picture of your beasts, email to ‘garth@garth.ca’.