By Ray Rivers
November 6th, 2025
BURLINGTON, ON
This may have been the most over-hyped budget ever. The consensus among many economists is it is neither as transformational nor as generational as the PM and his finance minister had billed it.
When an economy starts to go downhill as Canada’s has, it is government’s role to prime the pump. Stephan Harper did exactly that during the 2008 economic downturn with Mr. Poilievre in his caucus. And that is exactly what this budget does. The question many economists are asking is whether there is even enough priming given the challenges we face – whether Mr. Carney is being too cautious.
We are just not ready for serious import substitution.
Mr. Carney must feel it is too early for Canada to fully reciprocate by countering all of Trump’s tariffs. One factor is that Trump’s so-called emergency tariffs (his first ones tied to fentanyl and migration) are before the US Supreme Court. Were those tariffs to be ruled unconstitutional, the entire tariff apple-cart might be in play. Plus there might even be some compensation for us on the table. But don’t get your hopes up given the voting record of this highly partisan MAGA Supreme Court.
Second, all trade negotiations have been placed on hold ever since Ontario’s dysfunctional premier interfered in US domestic politics by playing those Reagan ads on US media. B.C. cancelled its planned ads on lumber trading once it saw the damage that Ford had done. And even the PM’s apology for the interference from one of his Team Canada premiers, has not brought Trump back to the table.
And third, we are just not ready for serious import substitution. It’s only been a few months since the tariffs landed. As an example, we are still importing US made beer cans despite the fact that the aluminum comes from Canada. So applying a tariff on US beer cans would just serve to raise the cost of beer – thus adding to inflationary pressure.
Fear of Inflation was the primary reason the Conservative opposition is claiming for voting against the budget. Somehow, Poilievre would be OK with $42 billion but not a $78 billion deficit. And somehow, the fear of recession and joblessness is of lesser importance than inflation. But then the Conservatives have almost never supported a federal Liberal budget over all the years.
Poilievre has reverted to being Mr. Negativity again – using the same old negative attack dog antics.
Besides, Poilievre has reverted to being Mr. Negativity again – using the same old negative attack dog antics which worked so well at eviscerating the previous Trudeau government. It’s little wonder that at least one MP has tired of this negativity and narrow-minded leadership and crossed the floor to join the Liberal camp.
Writing a budget in times like these is a balancing act. Maintaining the social safety net is critical to removing financial insecurity for Canadian consumers, since consumption is the antidote to recession. So pharmacare, dental care and child care are still in play despite the government shaving back the overall costs of its programs.
Do Canadians want Carney to shift how he has tried to work with Trump?
Canada is experiencing an economic crisis but most importantly there is also a crisis of confidence – in ourselves and our ability to rebuild a stand-alone Canada. Critics had warned at the time about entering into the kind of trade deal Mulroney had negotiated – warned about the inevitability of the outcomes we are seeing today. Still, we are fortunate that the USMCA has allowed us to avoid the full impact of Trump’s tariffs even if only until Trump finally squashes it next year.
I had been expecting more from this budget. It would have been good to see even more tax incentives and direct investment, particularly for small and medium business. Carney should have reactivated the digital services tax – money for nothing, a no brainer – which he cancelled in the naive and failed hope of expediting trade negotiations. And if Carney was really serious about new private sector investment why hasn’t he dropped the GST on Canadian made goods?
Ray Rivers, a Gazette Contributing Editor, writes regularly applying his more than 25 years as a federal bureaucrat to his thinking. Rivers was once a candidate for provincial office in Burlington. He was the founder of the Burlington citizen committee on sustainability at a time when climate warming was a hotly debated subject. Ray has a post graduate degree in economics that he earned at the University of Ottawa. Tweet @rayzrivers
Background links:
First Budget – Not Good Enough –
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