Rivers: It is an election budget.

Rivers 100x100By Ray Rivers

March 20th, 2019



This was unquestionably an election-year budget, with lots of little goodies sprinkled about for most Canadians. And it is costly with a still hefty on-going deficit. But is it too costly?

Newly minted People’s Party leader Maxime Bernier said it was “… irresponsible …because it’ll be future generations that will have to pay for it. They want to buy votes and that’s not the way to do politics — with people’s money.”

Trudeau Moreau

They want you to buy this book.

Mr. Morneau would probably argue the opposite. That is what government is all about – using our collective wealth for the betterment of us all. He claimed that his choice to deficit spend when interest rates were low, and even during good times, has resulted in a much healthier economy than when the Liberals replaced the Tories almost four years ago.

And the country now has the lowest unemployment rate in forty years. Management of the economy, or luck, has also resulted in a spectacular increase in the revenues flowing into government, to quote bank economists.

The government takes a longer term approach to debt management, targeting its debt performance as a percentage of GDP. And the ratio is declining according to the budget forecasts. Canada’s debt, unlike other nations in the G7, is largely held by Canadians, reducing the risk of foreign influence in our domestic economy.

New spending programs in the budget may seem like crumbs to neophyte NDP leader Jagmeet Singh. But every budget is a balancing act and this budget is very much about further support for the middle class and young starter families in particular. This is consistent with the strategy the Trudeau government has adopted since first coming to office.

They are offering a $5000 consumer rebate on electric car (EV) purchases and an immediate capital write-off for businesses purchasing EVs. That is the glove on the hand of the national carbon tax, providing an option to reduce the impact of the upcoming carbon tax, and freeing up annual carbon tax rebates for other purposes. There is a $45,000 limit on the vehicle value which should encourage auto makers to get more affordable EVs into the market place.

Nobody should argue about more money being allocated to municipalities for infrastructure. And who would quarrel with greater assistance for indigenous child welfare and indigenous drinking water improvements?

Nor should anyone quibble with more resources to protect our election systems from cyber threats. There is even more money for the RCMP and for the public prosecutor, the one who declined to exercise the SNC remediation agreement.

Jagmeet - scheer - trudeau

Andrew Scheer, Jagmeet Singh or Justin Trudeau – one of them will be Prime Minister. Will that person lead a minority government?

The government is taking first steps towards a national pharmacare program and developing a program to provide support to Canada’s beleaguered media industry and its fledgling digital information platforms. Details are still somewhat vague but one can see echoes of Justin’s father, and how he enabled Canada to become a major player in the global entertainment industry.

On the other shoe of climate change, there will be more money for emergency natural disaster relief. And given what has just taken place in New Zealand, the government will be allocating resources to protect community gathering places from hate crimes.

This is an election year budget and the message is ‘steady-as-she-goes’ but with some new seeding of the bare spots. The federal budget ended up overshadowing another election year event – an Alberta throne speech followed by an announcement of an election date. The NDP’s Rachel Notley is in the fight of her life against United Conservative party’s Jason Kenny, who has been implicated in some messy election corruption of late.

Notley is promising more industrial diversification to ready the economy for the day when oil will no longer be its mainstay. Kenny wants to turn the clock back to when oil was king, cancelling the carbon tax and cutting taxes for corporations and the wealthy.

Kenny and his Ontario buddy Mr. Ford define right wing politics in this country. Maxime Bernier is probably well intentioned, but a bit of an amusement as he gropes to find his way around the religion of Libertarianism. And he is still pretty much alone, though with aspirations to convert more tribal Conservatives over to his camp. And Preston Manning would be his model.

Mr. Scheer, on the other hand is turning out to be an embarrassment to the great, and even not so great, Tories who came before him. He is doing himself no favours banging on about SNC and treating Jody Wilson-Raybould as if she were a fellow Tory instead of a committed Liberal.

Sometimes one has to wake up smell the coffee and recognize reality.

Empty opp bench

During delivery of the budget speech the heckling was so intense that Morneau could not be heard – the the Conservatives cleared the opposition benches and left the House.

His antics in the House of Commons during the budget presentation, which again failed, sum up why his personal popularity as a leader pales behind that of the PM. Railing on like a angry person, sending letters to the RCMP, calling on the PM to resign, etc. won’t convince Canadians that he’d make a good PM. Clowning can be amusing, and annoying, but it won’t get him into the PM’s office.

As we head into the 2019 election, it would be fair to ask where Scheer stands on the issues that really matter to Canadians and where is his platform. It has been over a year since he promised to deliver a climate change action plan as an alternative to the federal carbon tax. Isn’t it about time he put his money where his mouth is, or let somebody more competent take on the job of party leader?

Surely one would expect the leader of the official opposition to be in the Commons chamber to listen to the annual budget being presented. It’s more than just being polite. Instead Scheer was hiding in the halls, playing politics.

Rivers hand to faceRay Rivers writes weekly on both federal and provincial politics, applying his more than 25 years as a federal bureaucrat to his thinking.  Rivers was a candidate for provincial office in Burlington where he ran against Cam Jackson in 1995, the year Mike Harris and the Common Sense Revolution swept the province. He developed the current policy process for the Ontario Liberal Party.


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5 comments to Rivers: It is an election budget.

  • Michael Hribljan

    We sometimes seem to forget that this is not the Liberal’s money, or the Conservative’s or NDP’s money, but it is OUR money. So, rather than have OUR money aimlessly dumped from a helicopter in the hope of buying votes for an election as this budget is doing, and our government seems proud to announce that, I would prefer to see some strategic investment in the competitiveness of our country, initiatives to truly drive growth and position us better for the future. There has been a lot of red ink since 2015, real GDP averaged only 1.9% which was less than the previous 4 years. So, in fact slower growth and we are much deep in debt. I guess the budget will not “balance itself”.
    We all continue to drive further to work, drive our kids to the hockey rink and spend more time in traffic, I’m sure there will be those that will chastise my comment about pipelines. So, with all the red ink in our budget we have no new pipelines, continue to sell our oil at a discount to the US (less than WTI) and import oil at Brent pricing on the east coast. That’s like growing your own tomatoes, selling them to your neighbor for 40 cents each, then going to the supermarket to by them at 70 cents each. If we can get our oil to the coast where its worth more, as a country we would have more of OUR money to do things that are more important to us. The harsh reality is that the world will continue to combust close to 100 million barrels per day of oil, and its forecasted to increase, let’s earn what we are entitled to and wisely spend those proceeds on climate change initiatives, heathcare, education and balance OUR budget.
    Here’s a bit more irony if you look at our economic data more closely I would contest that a good part of the economic growth in 2016 and 2017 and into 2018 that the folks in Ottawa are patting themselves on the back for, was in part to new oil sands projects coming online. Our oil production actually increased during this time as a result of projects that were approved and sanctioned between 2010 and 2015 and then put into operation. We all know the situation in Alberta and with no new production and hence we are relying on manufacturing and technology to pick up that slack. I would speculate this is part of the weakness we are starting to see in Q4 2018 and Q1 2019 in GDP growth among other things, and for me creates questions when debt is looked at as a ratio of GDP.
    The story around our AG and the political pressure for a DPA seems to grow as new information enters the media daily. I would comment that if one were to critically analyze JWR’s testimony and place documented information (notes, texts emails) on a time-line and compare that to the documented evidence presented by Mr. Butts cracks would start to appear. Listen to the testimony end to and chart the information and draw your own conclusions. Documented conversations trumps hear-say in every court of law, and “I did not remember it that way” caries no weight. Bribery and secret commissions are sometimes downplayed as it’s the way to do business in certain counties. This activity fuels organized crime, money laundering, drug cartels and terrorism. It needs to be taken seriously. Clearly many Canadians want to hear what more JWR would like to say.
    And finally, thank you Mr. White. And Mr. Rivers, your opinion pieces are becoming tiresome, we are all entitled to them (opinions), but after a while when they are no longer new, fresh or creative, and with the same old partisan spin, well….

  • Stephen White

    Yes Ray…it is an election budget. It gives lots of money away, much of it for optics. I suspect the Prime Minister and his patrician Finance Minister must have been lords of the manor in a previous life as they certainly like doling out gifts but they don’t trust Canadians enough to cut taxes and allow them to invest the proceeds themselves as they deem appropriate.

    Here’s what the budget didn’t address as enunciated in Jack Mintz’s article this morning in the National Post: 1) the deficit is now over $20 billion. 2) Federal gross liabilities are now $1.1 trillion. 3) Growth in output has stalled. 4) Business investment in Canada declined 4.5% in 2018. 5) Canadian industry is no longer competitive. 6) Gross public debt across Canada is now $2.5 trillion, most of which is borne by provincial governments. Add to all of this the fact that the average Canadian household holds $1.74 of debt for every dollar of equity and you have a country awash in debt and a federal government with no strategy on how to improve productivity, control spending or reduce taxes to make us more competitive in a global economy.

    Nowhere is this elitism more apparent than on the environmental front. $5K rebate on an electric car sounds nice on the surface, but as anyone who visited the Toronto Auto Show last month will tell you there aren’t a whole lot of electric cars available for under the $45K threshold. A Nissan Leaf, a Toyota Prius, a Kia Soul and a Hyundai Ioniq, and that’s about it. As for hydrogen powered vehicles, someone should advise the PM the Toyota Murai starts at $53K. I suppose if you inherit daddy’s antique gull-wing Mercedes you don’t spend a lot of time shopping for vehicles, electric or otherwise. If the PM really wanted to make an impact just cut the HST on electric and hybrid vehicle purchases, and mandate the conversion of diesel vehicles to hydrogen or liquid nitrogen. That would be decisive.

    As for the SNC-Lavalin story, it just doesn’t seem to go away, despite all the resignations and retirements and spin-doctoring. Interesting how the CEO of the beleaguered company yesterday refuted the PM’s claim about the 9,000 disappearing jobs, and how that was never a consideration in discussions around the DPA. Perhaps it’s time for Justin to formulate a new strategy on this file, maybe something truly novel and unique….like just telling the truth and admitting a mistake!

    • Philip Waggett

      Excellent analysis, Stephen, particularly on the business side–declining productivity and investment numbers do not auger well for economic growth. But how will the average voter react to this budget? Not in the way that the Liberal leadership–the two dilettantes, sprinkling their pixie-dust hope it will be received. In September, many voters will be voting “bread & butter” issues for their families as they consider the October election–key question for them: “Am I better off/getting ahead?” Bad news for the Liberals–they won’t answer this positively and sunny ways won’t cut it anymore.

  • Louise F.

    With all due respect (fyi – people never really mean it), pull your Liberal head out of your Liberal butt.
    Bill Morneau is married to a McCain. He has no clue as to the financial concerns of the middle class. For that matter, neither does Trudeau. But hey guys, you just continue to spend, spend, spend and buy those votes you are going to so desperately need come October.
    I’m confident that both the Cons and NDP will continue to keep the SNC scandal at the forefront and demand that Canadians get the answers they deserve. #letherspeak
    Andrew Scheer may not be the most dynamic guy to run this country but he’s better than the clown we’ve got in Ottawa now.
    And once again, if the Gazette truly wants to be considered as a legitimate news source, why are Karina Gould and Pam Damoff not questioned on a hot button topic like SNC Lavalin? What do they think of their fearless leader and his treatment of women and in particular, an indigenous woman, the numerous subsequent resignations, the retirement of Michael Wernick? I won’t hold my breath.

  • John Birch

    Completely agree Ray. Good article. The future generations argument is weak, and discounts the infrastructure they will inherit and strong economy they will grow-up in, the best in the G8.
    Governments are simply not households.

    The Debt to GDP ratio is dropping and forecast to continue to drop.
    It’s all good. Happy to support this government.
    Andy’s bunch blew it yesterday big time. What a bunch of infants.

    Projection Canada
    Federal debt (per cent of GDP)
    2017–2018 (30.4%)
    2018–2019 (30.1%)
    2019–2020 (29.8%)
    2020–2021 (29.4%)
    2021–2022 (28.9%)
    2022–2023 (28.4%)

    By Comparison the US Federal Debt to GDP 2017 (105.4%)

    2019 Budget Complete

    2018 Budget Overview

    Economic and Fiscal Outlook – October 2018 – Revised Oct. 31, 2018
    See PBO Summary Table 2

    Full Report
    Economic and Fiscal Outlook – October 2018 – Revised Oct. 31, 2018
    – Parliamentary Budget Officer