IMAGE CREDIT: Ottawa Citizen
Instead, I'm just going to give some of my thoughts on the budget and what I think it means for Canada and Canadians.
A $78 billion deficit
A lot of people are fixated on the $78 billion deficit this year. It is huge. However, when adjusted for inflation it isn't eye popping. Stephen Harper had a $56 billion deficit in 2009. Kim Campbell proposed a near $43 billion deficit in 1993. Adjusted for inflation those aren't that far off from $78 billion today.
Despite the Opposition screaming that those deficits would destroy Canada, the fact is, the country is still here. Life is still going on.
Economic Growth
Mark Carney is focused on really just one thing: supporting the economy for the next few years until the trade situation stabilizes. In fairness, that's a good goal and concern to address. If I were the Prime Minister, that would be my goal too.
Projections have Canada's GDP growing at around 1% for the next few years. That's not great, but far better than a 1% contraction year over year.
Defense Spending
One of the biggest annual pieces of the budget is now National Defense which includes the army, air force, coast guard, and navy. The Liberals have boosted defense spending to meet the NATO 2% target and are eyeing the proposed 5% target. There is an $81 funding package to get the military to upgrade its infrastructure and buy equipment.
This is actually something the Conservatives have said they would do if they were in power: fully fund the military. Now it is happening and we're all going to see if the Conservatives are as pro-military as they claim.
Infrastructure and other spending
The budget is full of big spending year over year to spur on things like ports, mines, roads and highways, high speed rail, airports, housing, carbon capture, and so forth.
The push here is to get Canada building stuff it needs which they hope will support the economy. If you're wondering does that work, China has been doing this for many years, and the result has been a lot of debt and world class infrastructure. China's ports, rail system, airports, roads and highways, etc are all decades ahead of anything in North America.
I don't think there's a final price tag on this but over the next five years we're probably looking at a couple hundred billion dollars of investment.
That said, keep in mind that some of these infrastructure projects will be PPP or Private Public Partnerships.
The Public Service
The public service, aka government workers are set to drop by a total of 10% of 40,000 over the next few years. The last guy to really take an ax to the public service was Jean Chretien. Almost all of the cuts will come through attrition. As people retire or leave, they won't be replaced. This is something that Conservative supporters have ached for ever since Justin Trudeau started fattening up the public service.
Immigration and foreign residents
Immigration numbers and temporary foreign residents are getting slashed. No they aren't going to zero, obviously. The 2026 and 2027 numbers should a rough 25% and then a rough 33% cut on temporary resident admissions. Then in 2028 the 2027 levels are maintained. That's substantial.
What wasn't in the budget
There were no new measures to help with affordability or new tax cuts or rebates for individuals or most businesses. I wasn't expecting anything either. The tax cut passed back in July was ill advised and worked out to about $420 per person, per year. That's not enough to offset an $1,800 a month rent.
The national dental care program and the new national pharmacare program didn't receive any new funding.
Is this a good or a bad budget?
The answer to that question depends on what you view as important, not important, and wasteful. If you think military spending is bad, then you'll probably hate this budget. If you think deficits are bad, then you'll definitely hate this budget. If you think spending on infrastructure is good, then you'll like this budget.
Here is what I think.
First, spending to support the economy during a serious economic crisis is a role of any federal or provincial government. We are definitely in an economic crisis thanks to Donald Trump's tariffs. But one could argue that Justin Trudeau set this country up for that crisis too by not working on the economy. Mark Carney said as much last March. Regardless, we're in an economic crisis and we have to navigate it.
Second, the spending is high but when measured in comparison to the size of the economy, and considering this is over 5 years, that spending is not as big as it looks. It is substantial, but don't let the raw numbers fool you. Canada's economy is huge by comparison, and this spending is not something that will break the bank in the short or medium term.
I personally think this is an acceptable budget. I don't expect the Opposition to support it, but I do expect a few members to not show up to vote or the NDP will abstain. Either way, it is going to pass.
My final thought on the budget
My final thought is that this budget is an about face for the Liberals. The Carney Liberals have shed their Trudeau era skin. They are 100% on the side of business development today. They are clearly in the pro-development column. They are 100% in the fund the military club. What we have here is a Liberal party that sounds and acts like a Progressive Conservative government we'd have seen in the 1990s or early 2000s.
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