GUNTER: Carney taking lessons from Trump bad for Canada's bottom line
This is a problematic approach, given the Liberal government's penchant for spending.
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As much as U.S. President Donald Trump loves to exercise power by executive order, rather than leaving lawmaking up to the U.S. Congress, it is becoming increasingly obvious that Canada’s very own Prime Minister Mark Carney loves governing by the Canadian equivalent – the order-in-council.
Consider for a minute Carney’s refusal to have Finance Minister François-Philippe Champagne bring down a budget until November or December. Rather than a budget and enabling legislation to authorize nearly half a trillion dollars in spending, Carney prefers to rule (and spend) by cabinet decree.
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Before April’s election, parliamentary budget officer Yves Giroux estimated the federal deficit for the current fiscal year would be just about $47 billion. That’s bad enough, but a significant decrease from the $62-billion deficit that the Liberals had to admit to before Christmas for last year.
But as Giroux pointed out at the time, his sum was only “a baseline.” His number was only what the deficit would be before any of the political promises the winning party carried through on.
Since the Liberals were re-elected, Giroux has estimated for reporters that the Carney government’s campaign goodies would raise the 2025-26 deficit to between $60 billion and $70 billion “in the absence of spending cuts elsewhere.” That, of course, is as bad or worse than last year’s Liberal amount.
Mark Carney intends for his government to spend more money than Justin Trudeau’s, and without a budget or proper accountability to Parliament.
But even Giroux’s latest guestimate doesn’t include measures the Carney Liberals have taken since the end of May without recourse to the House of Commons or a budget.
Enter Toronto’s C.D. Howe Institute.
The non-partisan think tank calculates that with measures announced by the Liberals since the election (right up to the cancellation of the digital services tax last weekend), the deficit this year will be $92 billion in the current fiscal year, $75 billion next year, $73 billion the year after that and $71 billion in 2028-29.
That’s a total of $311 billion in extra public debt in just four years. It took the Trudeau government 10 years to add $600 billion. That’s a rate of extra debt about 20 per cent faster than the rate built up by Justin Trudeau and his cabinets.
You may take comfort in the fact that Carney is a former central banker and international financier. I don’t. Canada already has a higher-than-average debt-to-GDP ratio for a developed nation. Carney’s orgy of spending will only make it worse.
You may agree with some of the Liberals’ fiscal policies. I do.
They’ve cancelled the planned capital gains tax hike, lowered the basic income tax rate to 14%, cancelled the digital services tax and dramatically increased defence spending. All good things.
But they do not appear to be ready to make any spending cuts.
What about the 100,000 new federal government employees added during the Trudeau years? Payroll and payments to individuals, such as pensions, are Ottawa’s two biggest outlays, but Carney plans no cuts to either.
Without spending cuts to balance off all the Libs’ new spending, the red ink will continue to tsunami through Canada and cause higher interest rates, higher inflation and less affordability for ordinary Canadians.
And all of this is being done without a budget or Parliamentary scrutiny.
Another example of how Carney, like Trump, is trying to circumvent democracy and rule by decree is Bill C-5, the recently passed law to fast-track “national interest” megaprojects.
The bill allows cabinet to decide which projects should be fast-tracked, thereby evading all the regulations that will continue to govern every other company and project in Canada.
In short, C-5 repeals no environmental regulations imposed by the Trudeau Liberals. Rather, it allows the Carney Liberals to pick and choose which companies enjoy cabinet’s favouritism and which must muck about in the mire.
And all by order-in-council rather than parliamentary debate.
Canada’s economy lost nearly $400 billion in investment during the Trudeau years. That trend will continue under Carney.
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