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An expensive, stale nothing-burger.
Here’s your piping hot take on what Budget 2023 is (and isn't) serving.
Canada's governing Liberal Party needed a political channel changer as they dropped today's federal budget.
They’re not going to get it from what they just served up.
Budget 2023 reads like something hastily pulled out of the back of the fridge for visitors the Liberals weren’t expecting, as opposed to a culinary masterpiece designed to pull skeptical Canadian voters back to the Liberal Party’s supper table.
Much of the budget is reheated announcements that the Liberals haven’t gotten around to delivering, or that haven’t been delivering results. There’s no freshness to it. Reading it, it’s tough to see what the Liberal’s vision is to achieve long-term economic growth or to address major geopolitical issues facing the country.
Even with the Liberals leaking details of the budget for days, the typical signs of a politically successful budget, like stakeholder groups falling over themselves to release enraptured supportive statements, aren't there. The response has been muted from typically friendly media outlets, and even the Liberal backbench seemed to have trouble mustering cheers for Finance Minister Chrystia Freeland’s budget speech in the House of Commons.
And by all accounts, there won’t be much excitement for it in the general public, either.
The Liberals continued insistence to blame the entirety of Canada’s economic woes on the Russian invasion of Ukraine and the pandemic, as Finance Minister Chrystia Freeland did in her speech today, was another surprising decision in the budget’s rollout. This approach doesn’t do much to show that the Liberals are ready to own up to decisions that they have made that haven’t worked out, and are ready to pivot to a new path of well thought out action.
To move out of a self-inflicted political polling wilderness, the Liberals needed the budget to hit a home run on issues that are top of mind for most Canadians. So here is your fresh hot take on how Budget 2023 lands on each of the notes Trudeau needed it to hit:
Showing fiscal restraint
Canadians expecting the budget to show restraint in spending will be disappointed, as the budget posted a $40.1 billion deficit for fiscal year 2023-2024, up nearly $10 billion more than was forecasted last fall.
With Canadian households and businesses associating high levels of deficit spending with the inflationary crisis and running out of allies to justify continued lack of restraint, the Liberals needed Budget 2023 to show the beginnings of a path towards balance. Failing that, they needed to show that the spending they did undertake had some measurable outcome on other vital issues, like housing affordability or improving government service delivery.
It’s tough to argue the budget did either.
While the government's decision to reduce spending on outside contractors, like scandal-plagued management consulting behemoth McKinsey, is welcome, the measure was likely only undertaken due to unfavourable audits and months of pressure from the federal Conservatives. As well, this spending only accounts for a drop in the bucket of the ocean of spending the government unveiled today.
TL;DR: fiscal restraint was decidedly lacking.
Making housing more affordable
Since the Liberals came to power in 2015, the average cost of renting a two-bedroom apartment was $949, while today, the figure sits at $2103. The average home price also doubled from 2015 to 2021, increasing from $413,000 to $811,700. With advocates across Canada raising this as a critical issue ahead of the budget and Conservative Leader Pierre Poilievre making it one of his top priorities, Trudeau needed the budget to show significant action on the issue.
On the affordable housing front, the budget mostly rehashes previous programs and doesn’t present a clear timeline or practical targets for access to housing.
TL;DR: in the wake of the budget, expect the cost of housing to stay the same.
Lowering the cost of living
The Liberals needed to table a budget demonstrating a real plan to address the structural causes of rampant inflation in Canada, including showing fiscal restraint. Instead, they put a shriveled fig leaf on the issue, with a minimal one-time subsidy that would barely cover 1/6th of one month's worth of groceries for a family of four.
With the federal Conservatives putting pressure on the Liberals on this issue every day, the Liberals lost an opportunity to put their stamp firmly on how they plan to get out of the inflationary crisis many Canadians now see them having a major role in causing. Instead, the budget will probably further cede ground to the Conservatives and the NDP on charting a path forward.
TL;DR: don't expect to get more at the grocery store for less.
Delivering better healthcare
In the wake of negotiations with the provincial governments on healthcare, Trudeau had an opportunity with Budget 2023 to address concerns that fixing Canada's healthcare system will take more than just money. With provinces left wanting more, Trudeau's recent deal didn't get the applause he was likely hoping for. However, Budget 2023 was curiously silent on one of the major political issues of the day.
TL;DR: the federal budget included little more to make seeing a doctor or nurse easier.
Preventing recession and spurring economic growth
This morning, economists were forecasting that Canada would head into 'mild recession' as tight monetary policy squeezes growth. The budget did not provide a visionary path that would address critical issues that business leaders have been raising, like labour supply, supply chain issues, and the regulatory and taxation burden.
For Trudeau to have posted such a visionless budget on the economic growth front is perhaps the most damning incident of a government that is increasingly looking out of touch and out of ideas.
Addressing climate change
With the United Nations International Panel on Climate Change issuing yet another dire report and the increasing cost of living in Canada, Trudeau has been under tremendous pressure to reduce greenhouse gas emissions while making life more affordable. By all measures, the Liberal's signature policy on climate change isn't getting the job done.
Many measures included in Budget 2023 that are ostensibly designed to address climate change are expensive rehashed announcements that don't include firm metrics for outcomes. They also do little to address critical issues like short term energy security.
TL;DR: Canada's GHG emissions reduction target path won’t get better after today's budget, but the carbon tax will continue to increase.
Making our military stronger
The budget offered little in terms of new spending to address Canada’s glaring military capacity gap. This omission will likely attract much attention from military observers and allied nations. How much of a role the New Democratic Party, who historically have opposed military spending, had to play in this decision will be the subject of much discussion in coming days.
TL;DR: the budget will disappoint Canada’s military.
And the early verdict is……
Politically, Trudeau isn't likely to get much of a polling bump from today's budget. Instead, it seems to have been designed to do the bare minimum to avoid an election over a budget vote, while acting as a political tourniquet by giving the media something to talk about over the next two Parliamentary recess weeks other than the foreign election interference scandal.
It’s clear that the scandals of the past months have pulled the Liberals away from both delivering on past promises and coming up with new ideas - the budget didn’t have much to show on either front.
How the budget plays in the public will have big consequences on Justin Trudeau, as well as Finance Chrystia Freeland, who has long been rumoured to be looking for an exit. If she wanted to go out with a plot-twisting showstopper of a budget that distanced herself from the Justin Trudeau style of political management, this wasn’t it.
The lack of fresh vision contained therein can only mean one of three things - either the Liberals are headed to prorogation or they are ideas, or both.
(But more on all this later. Stay tuned here in the coming days for a deeper dive into what Budget 2023 means for politics with crucial voter groups and the fortunes of various federal politicians.)
So the TL;DR on the Liberals' just-released federal budget is that they could have spent much MUCH less to say, "we got nothing, folks."
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