With all the focus last week being on the imploding Trudeau government, not nearly enough attention was given to the fall economic statement. Of course, having the finance minister quit just after 9 a.m. on the day she’s supposed to deliver an update on the government’s finances will do that.
With her blistering letter announcing her resignation, Chrystia Freeland definitely took more than a few parting shots at Prime Minister Justin Trudeau.
Describing the PM’s policies as “costly political gimmicks, which we can ill afford” and saying that Canada needs to keep “our fiscal powder dry” has people claiming Freeland was acting on principle. Jean Chretien’s former chief of staff, Eddie Goldenberg, is even touting Freeland as the next leader the Liberal Party needs because she is “a centrist, she has great economic credentials.”
Hardly!
It’s an embarrassment for Chretien’s legacy of balanced budgets for Goldenberg to claim this. Freeland’s record is one of missing fiscal targets, ever-expanding spending and deficits and increasing taxes.
Let’s start with her inability to control spending despite increasing revenues.
In the fall economic statement, Freeland projected that the federal government’s revenues for the current fiscal year would come in at $495.2 billion and spending would be $539.5 billion. That revenue projection is $2.6 billion lower than was projected in the April budget while the spending projection rose by $5 billion.
The projected deficit was $9 billion higher than the $39-billion deficit the budget tabled just eight months ago had called for.
Now, there has been a lot of reporting that the PMO pushed Freeland to spend more than she wanted to. The reports claimed that there was a tension between Trudeau and Freeland over fiscal prudence and some might think this is why the projections are so far off just months apart.
Based on the evidence, that would be wrong.
Freeland simply hasn’t been able to meet her projections in years. Perhaps you heard about the federal deficit for last year coming in at $61.9 billion instead of the $40 billion projected.
In 2022, federal revenues spiked, the projection in the April budget that year was $408.4 billion but by October it was projected at $445.9 billion. That’s a revenue increase of $37.5 billion but rather than shrink the deficit or pay down the debt racked up during the pandemic, Freeland boosted spending.
Between April and October of 2022, spending still increased from $453.2 billion to $472.5 billion. Jacking up spending by $19.3 billion even as COVID spending and programs were winding down is an incredible feat.
Don’t think for a second that Freeland is a centrist on economics, or competent.
Her book Plutocrats, released after she left journalism for politics, praised the work of people like socialist economist Thomas Piketty. Despite her recent backing of the GST tax holiday, Freeland has been far more likely to support increasing taxes like the annual increases to payroll taxes, alcohol and of course the carbon tax.
She left journalism for politics after a disastrous turn at Reuters where she was put in charge of digital and asked to launch Reuters Next. By the time she left to run for Parliament in 2013, that project was dramatically over budget and behind schedule.
Eventually it was shut down.
This past week, before she left her position as finance minister, Freeland tabled a fiscal update that had completely abandoned the supposed guardrails she had put in place.
Freeland is rightly getting plenty of kudos for calling Trudeau out for the feckless spending and economic vandal that he is in her resignation letter. The problem is, she was a willing participant, and an architect for much of what the Trudeau government has done over the past four years.
Her record isn’t one of fiscal restraint, or being a centrist, it is one of being a hard-spending Liberal with little concern for the public purse.