Today's discussion:

The Liberal’s big-government budget ups spending, raises taxes, and drops the pretences

The Trudeau government has driven up government spending so high using deficit financing that it’s now saying we need to raise taxes in order to pay for its higher public expenditures. Canadians will ultimately have to decide if it’s worth it.  

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Paul Attics

Questions on my mind when assessing this latest deficit budget…
– Is there a vision?
– Does it address foundational issues (governance, Federal-Provincial cohesion, efficiency of government, democratic improvement)?
– Is it part of a cohesive, clearly defined, and longer-term plan?
– Is it going to grow the economy?
– Is it prudently sustainable?
The answer to these questions seem to this citizen to be ‘no’.

17th April 2024 at 9:34 am
Kim Morton

This budget looks like a scorched earth policy by a government that knows it is not getting reelected. Not only will the new Conservative government be too broke to advance any policies of their own to fix the damage, they will most likely be forced to raise taxes even more to pay for the structural deficits they inherited. Which, of course, the Liberals will then attempt to make political points by claiming the Conservatives are raising taxes and not investing in social programs. The fact that the money needed for these programs is being used to pay interest on liberal debt will not make the front page in newspapers that just lost their welfare cheques.

17th April 2024 at 10:06 am
Gord Edwards

In one of my more cynical moments when they started talking about Pharmacare I was wondering if breaking the balance sheet was deliberate. The more hard decisions the CPC have to make, the sooner the public will ‘shoot the messenger’ and vote them out. If you are expecting to lose the next election it would be a strategy to shorten your time in opposition. But I try not to be that cynical.

17th April 2024 at 5:45 pm
Michael Sullivan

Looking back at the $45B that the federal government spent to attract battery plants in Ontario, at a cost of ~$5mm per job, makes me wish we had that money back for deficit reduction or perhaps for health care.
And this largesse is going to put batteries in electric cars that are suffering from weak demand. The cost of building the factories will not get smaller, but the economic payoff in wages and tax income might be smaller than they thought too.

17th April 2024 at 10:15 am
Michael B

Keep your eye on the TSX composite over the coming months and your pension savings portfolios.

17th April 2024 at 9:31 am
George R Hinchliffe

The Woke Tax and spend strategy continues. The Election cant come soon enough.

17th April 2024 at 9:09 am
Ray Howarth

Those morons will tax us into the poorhouse.

17th April 2024 at 9:51 am
Ed Cave

My comment is on Boomers health spending for the next years. We boomers have paid our way through the years for all our government benefits through taxes. We built the schools, hospitals, roads, homes and infrastructure. The public servant’s misspent that money for special purposes. They bought votes and ran up debts for their own use. How many good meaning politicians entered offices with a reasonable wealth only to leave as millionaires with a winter home outside of Canada? Look at the state of our country while we paid more taxes and now our grandchildren are in debt. Who hasn’t balanced the books on debt??? That would be our steadily increasingly well paid politicians and bonus driven bureaucracy.
These same buffet eating politicians are trying to drive the wedge between boomers/gen x, Quebec/Canada, Canada/Alberta, woke/right, truckers/ Ottawa, Trudeau/taxpaying Canadians, Indigenous/ uninformed, etc etc etc.
It’s time to wake up and smell the bullshit from our elected officials. They need more accountability besides every four years of promising the moon only to get a rain storm. No more promising without budgets and accountability to taxpayers not school buddies. It’s time for better transparency, balanced books, accountability and criminal justice for corruption.
Don’t blame the boomers blame those that ruined it for the rest, the millionaires that used our taxes against us.

17th April 2024 at 11:37 am
Valerie

CPP contributions had to nearly double to for boomers to pay for their own retirements sustainably in response to predicted demographic change, where there’s no question of money being misallocated because it’s a separate fund. Taxes going towards healthcare costs and OAS did not increase a similar amount (where there was no mechanism to switch away from a pay-as-you-go model anyway), so it’s hard to see why people are so confident they paid enough and it was just misspent.

17th April 2024 at 4:30 pm
Don McLaughlin

Trudeau employs his most effective divisive political weapon by trying to start an inter generational war.

Those who now feel hard done by because housing and other costs have sky rocketed in the past nine years are the same cohort who elected the Trudeau regime three times. They have themselves to blame for following the false messiah that Justin is.

Correcting the mismanagement will be painful but must occur if the country is to survive. I hope those under 40 now understand their responsibility and the type of govt they must now support.

17th April 2024 at 1:18 pm
A. Chezzi

While the Liberals are spending, the Con would cut. Health care, education, housing, rent, environment, all programs relating to these matters would be cut and the individual would bear the cost. That is Con ideology, Small government means less involvement, less regulation, and while the wealthy can get by and better, the rest struggle to make ends meet. Poilievre, for all his simple slogans has not provided any plan for meeting the issues facing Canadians. His slogans will not bring down inflation. They would not affect grocery prices or rent. Health care and housing would still be in a mess. Trickle down, the be all and end all of Con ideology doesn’t make anyone well off except the well off. If Canadians would take the time to look at Poilievre’s voting record in Parliament, it shows where his values are and how he would govern. The average Canadian will not benefit. I am concerned that Poilievre will never show Canadians a plan but just continue to use rage as a lever to get power. I hope Canadians are wise enough to see through this and demand concrete proposals from Poilievre.

17th April 2024 at 8:17 am
Harriet

You would rather have someone who lies to you, never keeps a promise ( except when forced to bow to the NDP, to stay in power) fires the best Ministers he ever had because they were right. etc etc, etc, ?
Now he’s making promises to young people, who can hardly pay their rent, or feed their families, that he will never keep.

17th April 2024 at 8:51 am
Greg Jackson

You can’t spend what you don’t have. That is a fact of life that Liberals and leftists in general don’t understand. All the Liberal spending is either borrowed, or taxed from productive members of society and corporations that provide products and services that people need, much more efficiently than government. The more these people and businesses are taxed, the less they have to invest in providing jobs and growing the economy. In many cases, they will leave for greener pastures elsewhere. That is happening today. Young professionals and entrepreneurs are taking their money and ideas to other countries, rather than supporting unproductive, massive governments.
In your comment, you ignore the fact that the inflation, high prices, and sub-standard healthcare are all the result of Liberal and NDP policies and runaway spending. The result of that is that we are now spending north of $20,000,000,000.00 per year on interest on the federal debt. That money cannot be used for social programs that you support. Each year, we start by paying interest and the more they spend, the higher that number gets. This is a pretty simple explanation of economics, but I’m guessing that you’re a pretty simple person, from your comment. In the general population, fifty percent have an IQ of less than 100. In a democracy, they account for fifty percent of the voters. These are the people that this budget targets.

17th April 2024 at 10:57 am
Cyril Gibb

“shows where his values are”… in reference to Poilievre

How about Trudeau’s values:
– Groping a female reporter in BC (which happily at least apologised for)
– twice been found of ethics violations by the Federal ethics commissioner
– the SNC Lavalin scandal and the resulting resignation of two disgusted female Liberals
– multiple “blackface” instances
– hiding election interference by the CCP, initially by appointing his buddy David Johnston and then dragging their heels and deflecting by accusing questioners as being racist
– conflict of interest in the WE Charity scam enriching his family members
– accusing anyone disagreeing to be a Nazi, homophobe, islamophobe and whatever else pops into his tiny little empty mind
– increasing immigration to ridiculous levels far beyond the capability for the country to absorb, and then telling us he’s the one we should trust to fix it (and increasing again in 2024 and 2025)
The list goes on.

I too “hope Canadians are wise enough to see through this”.

17th April 2024 at 12:53 pm
Bernie Langlois

the chances of attaining the projected deficit are slim
We are in for a disastrous few decades till we get rid of the socialists and provide leadership

17th April 2024 at 7:03 pm
Gord Edwards

To summarize the federal budget, it ignores the big problems while continuing to create more of the same problem (ballooning debt which will be paid by future generations).

The changes in capital gains taxation are getting a lot of attention. I’d like to put forward a related idea that hasn’t been discussed. This isn’t about financing federal spending per se, although it would certainly impact the bottom line. I don’t think focusing on immigration and NIMBY land use policies is going to fix housing. And we need investment to stimulate economic growth.

How about eliminating the capital gains exemption on principal residences and incrementally increasing the taxation of profits to 50% like any other capital gain?

Yes, my wife and I own our home. I have skin in the game.

The criticism of capital gains exemptions is that people (evil capitalists) can buy stuff and make profit just by virtue of owning it. The counter argument is that a special tax status encourages investment in the economy. However owning a home doesn’t stimulate the economy in any significant manner, and some have lamented that too much capital is tied up in real estate while businesses are starved for investment.

I’ve heard that historically housing was viewed as a commodity and only relatively recently (in the 1980s?) started to be viewed as an investment opportunity. But once enough people see something as a good investment it becomes a good investment, as people will be incentivized to pay more to chase the promise of future profit.

Taxing residential property capital gains should:

– improve housing affordability by putting downward pressure on housing prices. Home ownership would still have many advantages such as family stability, but buyers would be less inclined to spend exorbitant amounts for the ‘promise’ of future returns.

– boost growth by freeing up capital for investment in businesses. As housing becomes a less attractive investment, those with capital to invest will need to look elsewhere. Canadian firms will need to compete for that investment of course. But with less money locked into residential real estate there would be more opportunity to attract investors.

Yes this would no doubt be a financial windfall for governments. But what they would do with it is a separate issue which would vary with different governments. However it could be presented as part of a plan to pay down the debt and avoid future generations paying for historic spending. Trust in government being a key criticism of my idea, I acknowldge.

This would have to be phased in over time to avoid a major market disruption. 5%/year for 10 years or 2.5%/year for 20 perhaps? That would rely on future governments to see it through. But if a government had the audacity to start it and put such a plan down, it could continue. We still (mostly) have the Mulroney GST and free trade despite both policies being panned at the time.

There would no doubt be political costs. ‘No good deed goes unpunished’.

17th April 2024 at 1:40 pm
Valerie

The problem with thinking about “big government” is that it’s going to cost a lot more just to run in place, for a long time. It will take huge increases in OAS spending just to keep the same benefit level as more boomers retire (although the previous benefit increase didn’t help). More or less the same with healthcare, although there’s a question about how much the federal government shoulders.

Even infrastructure spending, rebranded as a housing initiative, is essentially a cost of population growth. It’s frustrating to see it advertised as some kind of gift to millennials for the federal government to pay some of what its immigration initiative costs, again just to run in place. Faced with more expensive government that doesn’t feel any bigger, it’s not obvious that some smaller-ticket items that ‘feel like’ new spending is such a bad political choice. This is especially true for housing where many of the announcements are loans, or non-budget policy announcements effectively stuck onto a budget item. It seems like a forgone conclusion that the question going forward is just going to be about who pays, because cutting spending (like OAS) that people feel was already promised seems unlikely to happen and young people would be justifiably resentful if keeping the expense of government the same meant cutting other programs dollar-for-dollar as spending on seniors increases.

17th April 2024 at 10:51 am