Carney’s first budget fails to act boldly to fix economy

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Deficits are rising, costs are rising despite rhetoric of austerity and austerity, and the cost of servicing Canada's debt exceeds the amount the federal government spends on health care. Mark Carney's first budget was not about austerity; it was not a generational change; in fact, it was not what was advertised in any form.

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This does not mean that appropriate measures are not being taken, but this is another example The Carney government is overselling and under-delivering.

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Annual spending deficits have risen sharply. The $78.3 billion figure is more than double the $38.9 billion deficit the government projected in Budget 2024 and remains well above the $42 billion forecast in the Autumn Economic Report last December.

The government forecasts revenues will be $507 billion, down about $4 billion from last year, while overall government spending will rise by $37.6 billion. The cost of servicing government debt will reach $55.6 billion this year and rise to $76.1 billion by 2029-30.

By comparison, the federal government's spending on health care (Canada Health Transfer) will be $54.7 billion and rise to $65 billion by 2029-30, well below interest costs on the debt.

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This is a large spending budget; This is not a spending cut or an austerity budget. Even cutting the number of government employees by 40,000 would not return us to pre-pandemic federal employment levels, and the decision would likely be to not replace people who quit or retire rather than actually lay off workers.

Budget gives CBC an extra $150 million

Further evidence that this is not a budget cut (other than a 7% increase in spending) is that Carney has promised the CBC an extra $150 million this year and, better yet, has committed in this budget to try to get Canada into the Eurovision Song Contest.

The government also promised $38.7 million over three years to fund a $742 million gun confiscation program that is unlikely to work. Eliminating the program to remove guns from law-abiding, licensed Canadians would be an easy way to save money.

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The government has fallen some taxes it was more about virtue signaling than income generation, and that's a good thing.

Luxury tax decreased

Gone is the 10% luxury tax on things like private jets and yachts. The tax has hit Canadian boat makers and Bombardier, one of the world's leading private jet makers, which has not sold a single plane in Canada since the tax was introduced in 2021.

The government is also promising to scrap underutilized housing tax, which is costly and difficult to administer.

Also on the positive side, the government is introducing measures to “immediately spend funds on manufacturing or processing buildings.” This will allow companies to write off, for tax purposes, investments they make that will help improve productivity in the economy.

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They also provide tax incentives for liquefied natural gas projects that have real potential to increase Canada's GDP.

The government has not announced a lifting of emissions caps for the oil and gas industry, but has hinted that it is leaning in that direction. The only thing they won't do is scrap the industrial carbon tax, which is seen as the backbone of the government's climate change plan.

It's interesting to read the federal budget, which is still concerned about the expansion of the oil and gas industry, but at the same time indicates that such low oil prices are putting pressure on the Canadian economy and government revenues.

Carney misses an opportunity

Carney had the opportunity to live up to his words with this budget and think big, act bigger and move at a speed unseen in previous generations. Once again, Carney does not fulfill his promises, although the public would ardently support his actions.

It is unlikely that we will see an election as a result of this budget. Conservative MP Chris d'Entremont from Nova Scotia became Liberal MP Chris d'Entremont from Nova Scotia. Other MPs may follow suit, or we will see MPs find a way to pass the budget.

Unfortunately for Canadians, this budget is a missed opportunity for generational change, and we will all be poorer for it.

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