Justin Trudeau has finally answered the question of how fiscally irresponsible a prime minister would have to be before Liberals, of all people, start complaining about the government’s lack of restraint.
On Monday morning, hours before she was scheduled to table the fall economic statement, Chrystia Freeland resigned as finance minister and deputy prime minister, with a scathing letter criticizing Trudeau for engaging in “costly political gimmicks, which we can ill afford” at a time when the government should be “keeping our fiscal powder dry” to deal with trade threats from incoming U.S. president Donald Trump.
The fall economic statement that was tabled later in the day shed a bright light on Trudeau’s profligate spending and the dire fiscal situation this country finds itself in. Despite Freeland’s promise to keep the deficit below $40.1 billion in the spring, the fall statement missed that target by a whopping $20 billion, with the deficit for the 2023-24 fiscal year coming in at $61.9 billion.
And next year is not expected to be much better. As the Liberals are apt to do, Monday’s mini-budget announced an additional $45 billion in new spending over the next six years, ensuring that even next year’s deficit would not meet Freeland’s pledge.
It is now expected to be at least $48.3 billion, but given that it is an election year and the government will likely have to do more to deal with Trump’s concerns over border security and defence spending, we can expect it to be much higher than that.
Freeland clearly knew the prime minister’s harebrained plan to bribe Canadians who have been put off by nine years of Liberal government with a temporary GST tax holiday on Christmas-themed items and $250 rebate cheques would put the lie to the “fiscal guideposts” she had pledged to stick to when she tabled the spring budget.
According to a report in the Globe and Mail last week, this caused tension between the Prime Minister’s Office and finance officials, who felt Trudeau was pressuring them to implement policies that made little economic sense.
The continued high spending was evidently too irresponsible even for a dyed-in-the-wool socialist like Freeland. And for Trudeau, the idea that his right-hand woman would object to the Dear Leader’s policy dictates was apparently too much.
According to Freeland, the prime minister told her on Friday that she would be shuffled out of the finance portfolio days after tabling the fall economic statement. He apparently expected her to take the blame for his own misguided policies, before accepting a demotion.
That her resignation three days later appeared to catch the prime minister completely off guard is astounding. As it turns out, it’s hard to ask someone to “take one for the team” when the team is coming apart at the seams.
Indeed, Freeland is not the only Liberal MP who has expressed concern about their own government’s reckless spending in recent days. Last week, Liberal backbencher Wayne Long warned that the government did not have “an unlimited pot” of money, telling the Post, “I think that we do need to show fiscal restraint.”
Marcus Powlowski, the Liberal MP for Thunder Bay—Rainy River, also said he hoped the deficit would be “zero,” but knew that was “not going to happen.” Apparently attempting to explain away his government’s continued deficit spending, Powlowski compared the situation to unexpected expenses that Canadian families routinely have to deal with.
“Occasionally, things are going to come up. Your car breaks down, there’s a hole in the roof. You’ve got to spend extra money. I mean, that’s the reality of life,” he said. And he’s absolutely right — there is always going to be some type of crisis that demands a government response.
In 2020, the COVID-19 pandemic caught the Trudeau Liberals by surprise, causing them to blow past their deficit targets. But this was at least somewhat understandable. To quote Monty Python, “Nobody expects the Spanish Inquisition.”
Then there was the war in Ukraine and a period of high inflation that made life increasingly unaffordable for many Canadians. As with COVID, the Trudeau government’s response to these issues, and practically all others, was to spend money like it was going out of style.
At the same time, rather than cutting spending in other areas or putting off some of their costly pet projects, the Liberals announced a series of big-ticket spending commitments on policies such as socialized child care, dental care and pharmacare, largely to ensure the NDP would continue to prop-up their government.
Now, Trump’s threat of imposing a 25 per cent tariff on Canadian goods demands more government spending on border security and policing. The “comprehensive border security package” announced in the fall economic statement will cost taxpayers at least $1.3 billion over the next six years — likely much more given Trump’s myriad concerns and the lack of details about how the government plans to address them.
Yet even before Trump’s reelection, Trudeau had already doubled the national debt. He had already blown past his government’s own deficit target, according to a parliamentary budget officer report in October.
And instead of tightening their belts when it became clear that dealing with the tariff threat would take considerable spending commitments, the Liberals decided to blow a $1.6-billion hole in their budget by removing sales taxes on beer and “Hanukkah bushes” over the holiday season. Trudeau also wanted to spend another $4.68 billion to bride Canadians with their own money, but that measure has yet to pass the House and was not even mentioned in the fall economic statement.
Given the sorry state of this country’s finances and the prime minister’s clear penchant for prioritizing his own political interests over those of his country, or his party, it’s not surprising that Trudeau has seen a growing backlash from his own caucus in recent months. It’s just too bad that Canadians had to be saddled with a $61.9-billion deficit and over $1.2 trillion in debt before Liberals started saying “enough is enough.”
National Post
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