Carney’s nation-building budget misses the point on Canada’s affordability crisis
Finance Minister François-Philippe Champagne pictured with Prime Minister Mark Carney on budget day, Nov. 4 / TWITTER PHOTO
While many opposition MPs are voting against the federal budget in the ongoing series of confidence votes in the Commons, it’s not at all clear how many of them really want to go out and fight an election campaign against the Liberals’ promised $51 billion to help build hospitals and hockey rinks.
Under the Build Communities Strong Fund that was one of the few surprises in Tuesday’s budget, Prime Minister Mark Carney’s government even listed two dozen high-profile community projects across the country that could go ahead with Ottawa’s financial support. And the projects the Liberals are dangling are aimed directly at ridings of many Conservative, NDP and Bloc MPs.
For instance, the Conservatives’ Warren Steinley can look to the new fund to help improve the RCMP Heritage Centre in his Regina—Lewvan riding. Similarly, Edmonton MP Heather McPherson, who has entered her party’s leadership race, might think twice about voting down proposed support for the Rapid Fire Theatre in her district. Or there’s new Conservative MP Vincent Neil Ho, who discovered possible funding in the budget for a Victims of Flight PS752 Memorial in his Toronto-area riding.
Whether or not this array of poison pills actually makes much difference in the Commons voting over the Liberal minority’s economic plan, it appears on balance that the budget will be a success—at least in the short term. The Conservatives are embroiled in internal dissension and the NDP is in no position to fight an election. So the Liberals, who only lack a couple of votes to avoid being defeated in Parliament, are likely to see the legislation pass.
Bold plan
And the budget’s billions of dollars to support tariff-hit sectors and incentivize a new era of business investment have been generally welcomed by the business community. As well, pollsters say many Canadians are still willing to give Carney the benefit of the doubt as he launches his bold plan in hopes of overhauling the economy during the catastrophe visited on Canada by U.S. President Donald Trump’s tariffs.
But the longer-term prospects for Carney’s economic and fiscal strategy are far from certain.
To remake the economy in a more resilient, productive fashion and blunt the attraction of Trump’s business incentives, the budget seeks to boost business investment here through a range of measures. These include the Productivity Super-Deduction, the Major Projects Office, a Trade Diversification Strategy and the large investments in infrastructure.
But it was quickly recognized on all sides that the success of this ambitious strategy will hinge on whether corporate Canada buys into it and moves to take advantage in a significant way of the tax credits and other incentives meant to prompt investment in energy, infrastructure, defence, manufacturing and other projects.
“To attract capital investment to fuel the growth we need, the government is making some large expectations on returns,” Matthew Holmes, Executive Vice President and Chief of Public Policy at the Canadian Chamber of Commerce, put it. “It will be up to businesses to see if this will be enough to spur the level of economic activity, return on investment and capital attraction the government hopes for.”
Beyond that, it is abundantly clear that the budget, despite a few measures to partly improve affordability, failed to address the cost-of-living and housing crises dominating people’s concerns.
While Carney is allocating $13 billion to the government’s much-watched housing initiative, for example, earlier claims about transforming this overpriced market through a revolution in homebuilding seem to have gotten lost in the shuffle. The section in the budget document entitled “Supercharging Home Building Across the Country” features a dissertation on how hard it is to construct houses here. The new Build Canada Homes agency will mainly work to get socially-affordable and co-op housing built.
While a major economic upsurge based on diversified exports and infrastructure-building might create the new jobs and government revenues to take the edge off the current affordability malaise weighing down Canadians, that’s an uncertain, long-term play. In the meantime, if the Liberals end up going to the polls in the coming months, Carney’s theoretical, high-level vision for rebuilding the country may look pretty thin to voters coping with insecure jobs, crippling housing costs and outrageously high grocery bills.
