Commentary
It’s always telling how a government frames its budgets in its own press releases and summaries. What the government puts front and centre, what they direct you to look at first, tells you about their priorities.
The Canadian federal budget unveiled on Thursday with the title “masters of our destiny,” prioritizes economic investments and the business community.
Before breaking down the relief measures provided to average Canadians, the government first draws our attention to how the budget “catalyses growth.”
The first two measures they highlight are the Canada Strong Notes, which will allow Canadians to personally invest their money in nation-building projects the government is developing, and the Canada Growth Incentive, “a new tax exemption on up to $15 million in capital gains from eligible investments.”
Let’s unpack that for a second: so during a time when everyone observes grocery prices surging, the budget’s main priorities are asking Canadians to shell out their own cash to fund government projects and giving massive tax breaks to people who make multi-million dollar investments.
It’s remarkable that this is the sort of thing they place front and centre. In some ways it’s a welcome change. Budget releases at all levels of governments tend to highlight all the free stuff they are dishing out to specific demographics and special interest groups.
Now this budget still has a fair bit of that. But the parts it wants to amplify the most are the economic growth policies. This sends the signal that growing the economy is the important part and is what must be done before the free stuff is handed out. It’s nice to be sold on a vision instead of bribed with our own money.
The question becomes how long people will rally behind the vision and when that vision translates into results, especially when government hands out billions of dollars in business incentives.
The Canada Strong Fund is getting a top-up of another $25 billion and the Build Canada Homes agency is getting an additional $13 billion. There are also billions earmarked for the Forest Sector Transformation Strategy and the Critical Minerals Strategy.
“It’s a budget for builders,” observes Build Canada, a non-partisan civic movement associated with the tech world. It describes this as “the first federal budget in over a decade to recognize and reward entrepreneurship as a key driver of economic growth.”
One question people are starting to ask about the government’s priorities though is whether it wants to get out of the way of builders to let them build or whether it considers itself one of the builders.
A column published in The Globe & Mail the other day, in advance of the budget, generated a lot of heat on social media. Or should I say the column’s headline got people talking.
The headline read: “If Canada wants economic security, it must tolerate a bigger government hand in business.” The column was authored by a public policy professor who was previously a chief of staff to cabinet ministers.
The government is already heavily involved in the business world. How much more are we talking about here?
“Twenty five years of growing government, the biggest it’s ever been,” Conservative Deputy Leader Melissa Lantsman remarked, in response to the column. “What we got: tanking productivity, fleeing investment, R&D at a 30 year low, almost zero competition and more regulation. And the hot take is… more government?”
The Liberal government will likely say that we’re now talking about the right kind of involvement—one that is laser-focused on promoting growth.
This growth promotion is not without its costs though. As Conservative Leader Pierre Poilievre described the budget, “this is the single biggest borrowing binge in Canadian history.”
The interest payments on this debt are rapidly increasing. It better start generating growth soon—in the form of more jobs and spending and therefore more tax revenue to make those interest payments.
There’s definitely a bias in the federal government’s preferred sectors, towards tech and AI. This makes sense in terms of embracing disruptive and emerging industries. What’s been absent though is any serious attempt to support manufacturing.
We need to be making more of the products that we consume. Yet government policy has too often pushed manufacturing out of Canada, especially with policies that lead to high energy rates.
The budget spends a lot of money, and piles on a lot of debt, betting big on backing certain types of businesses. It will be a number of years until we see what sort of returns we’re getting on those investments.
Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
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