Prime Minister Mark Carney makes an announcement with Ontario Premier Doug Ford at the Darlington Energy Complex in Courtice, Ont., on Thursday.Laura Proctor/The Canadian Press
Prime Minister Mark Carney opened his prebudget speech with a compare-and-contrast for the students in the small audience at the University of Ottawa on Wednesday night. Like the students, Mr. Carney said, he went to school and entered the work force during a time marked by “events of great magnitude.”
In his time, there was the fall of the Berlin Wall, “leading to a long period of liberalization of the movement of goods, capital and people,” he said. “It was an era of optimism, hope, and promise.” Now, he told the young people in the room, the great events are moving in a different direction.
Uh-oh, kids. Sounds like you’re done for.
Of course, Mr. Carney didn’t carry that line all the way to full-on gloom and doom. His diagnosis of a world in economic turmoil, and the end of the United States as we knew it, gave way to his more hopeful rhetoric about things Canada can build for itself, a promise to give back the future to young people and the greatest hits of his governing agenda.
With all that, he sort of buried the lead. The message that he smothered in all that sauce was this: “Brace yourselves.”
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Mr. Carney talked about sacrifices. He talked about cuts to mail services as a positive, saying that when his government saw Canada Post losing $10-million a day, “we made responsible choices.” And more will come in the Nov. 4 budget.
“Even with such efficiencies and better management, we will have to do less of some of the things we want to do, so we can do more of what we must do to build a bigger, better Canada,” Mr. Carney said. He said transforming the economy won’t be done easily, or in a matter of months, then promised to be straight with Canadians through what, by the end of his speech, again sounded like tough times.
The Prime Minister will spend the next week on a swing through Asia, but he was waving flags for Canadians who don’t yet realize that something big is coming.
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The nature of that big thing is still quite mysterious. Mr. Carney was warning about spending cuts – Desjardins Group deputy chief economist Randall Bartlett estimates they will amount to $15-billion in the next fiscal year alone – while also saying the federal government has fiscal capacity and now is the time to use it. It’s hard to put that spend-less-to-invest-more into a deficit figure, but it’s going to be very, very big and written in red ink.
By now, Canadians should be accustomed to Mr. Carney pointing to crisis to mobilize political will for his program. This prebudget speech was another round of that. He talks about the “investments” of the budget as being “generational,” which now seems to mean either something that happens once in a generation or something that will shape the next one. Mr. Carney makes it sound like a Marshall Plan for a post-trade-war Canada.
It’s not clear how much of the “investment” is to come through public money but Mr. Carney was telling us it will be a lot. It is less clear how heavily Finance Minister François-Philippe Champagne’s budget will lean into tax reforms or incentives to try to attract private investment. Mr. Carney has said it will include a “highly competitive corporate tax system.”
Certainly, there has rarely been a prime minister who has packed so much of his politics into one budget. And it is more than the public finances.
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Wednesday night’s speech told us that the budget will also include an immigration and training plan that will presumably include the targets for immigration that the federal government must set each fall – the Carney government’s response to a steaming backlash after a massive surge in temporary residents.
He also said the budget will also include his delayed climate competitiveness strategy, the first climate-policy outline of Mr. Carney’s tenure. Although its inclusion in the budget suggests it will be more generalities than specifics, it will still be a tricky exercise for a prime minster who promises both emissions reductions and energy development – and has opened the door to a new oil pipeline.
For eight months, he set high expectations. Now many of them must be reduced to arithmetic – in a volatile economy with a U.S.-Canada trade deal still not done. Mr. Carney’s message was to prepare for big budget shocks in uncertain times.