Finance Minister Chrystia Freeland’s Monday economic update was a triumph for Prime Minister Justin Trudeau.
In committing Canada to unprecedented levels of debt-financed spending, now and in the future, Trudeau fixes the agenda not only for his government but those to come later. No future prime minister can credibly pledge to balance the budget when Ottawa has committed to hundreds of billions in spending for which it lacks the money, much less whittle down a debt pegged to hit $1.4 trillion by March. Austerity, the Liberals favourite curse word, is as dead as disco. You can’t austere yourself out of $1.4 trillion. You’d have to fire the entire civil service and shutter Ottawa for a year or two to even make a credible dent in the pile.
To ensure that can’t happen, the prime minister has dramatically raised expectations of what government is supposed to do for Canadians. Pandemic spending is just the start. Freeland hinted broadly that her first budget next year will continue the process, with big new debt-financed federal commitments for national daycare, extended care and pharmacare plans, any one of which would previously have been deemed ambitiously expensive. Now we’re to get all three.
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