, 04.08.2022 09:52 AM

My latest: surprise, surprise – budget 2022 misses the mark

Here’s one thing we know for certain about this week’s federal budget.

It’s going to pass.

That’s a line from veteran NDP strategist Karl Belanger, and it is both (a) true and (b) funny. True, because the Jagmeet Singh New Democrats and the Justin Trudeau Liberals are indisputably, now, the Axis of Weasels – a coalition NDP-Liberal government, wherein the former will keep the latter in power for years to come.

Belanger’s line is also funny, but the joke is on us. Because, if you were hoping for a federal budget that meaningfully improves your life, folks, you’ll need to keep looking. Because the 2022 budget – nominally Chrystia Freeland’s, but really Jagmeet Singh’s – really won’t.

Everyone is anxious and on edge, this spring, and the Three Horsemen of Anxiety are to be seen everywhere, galloping hither and yon: a pandemic that is getting worse, a war in Europe that is getting more horrific, a wave of inflation that is at a 30-year high.

And, if you were hoping the Axis of Weasels budget would truly address any of those things, you will be disappointed. Let’s deal with each Horseman individually.

COVID-19: The Horseman of COVID is rampant in Canada, with as many as 120,000 Ontarians getting infected every single day. The 2022 budgetary pandemic response? To do less, not more. “Our ability to spend is not infinite,” said Freeland, which is news to Trudeau-watchers – and which will certainly enrage the provinces, who desperately need assistance to fund the ongoing fight against COVID. Now.

War in Ukraine: As is well-known, Vladimir Putin is truly a Horseman of the 2022 Apocalypse. To oppose Putin’s genocidal war in Ukraine, Freeland had one job: to meet our NATO spending commitment. Our allies have asked us to do that, NATO has asked us to do that – Hell, Barack Obama appeared in Parliament back in 2016 to give a speech and say that: “NATO needs more Canada.”

Well, pleas from Obama, Ukraine and NATO went unheeded in the 2022 budget: Freeland, Trudeau and Prime Minister Singh could not bring themselves to even meet our piddling two per cent of GDP target. Not even that.

Inflation: The third and final Horseman of the 2022 Apocalypse is inflation, and Freeland at least acknowledged it. Because inflation is picking the pocketbooks of Canadians from sea to sea to sea.

Freeland’s response? To spend even more, thereby pushing inflation ever-upward. Sixty billion more in spending, in fact, with a plethora of housing-related programs, green programs, program programs – and, as the NDP demanded, a new national dental care program.

The result? Around $1.2 trillion in debt, and a black hole where the Chretien-era balanced budgets used to be.

In fairness to Prime Minister Singh, this needs to be said: on Parliament Hill – which is a few city blocks surrounded by reality – far too much fuss gets made about budgets. Those of us in the media, and in cloistered political circles, get really worked up about them, but real people don’t.

Joe and Jane Frontporch – the ones who are buffeted, every day, by the aforementioned Horsemen of COVID, war and inflation – couldn’t tell you three things that were in the last federal budget if you gave them a billion dollars (which Messrs. Singh and Trudeau just might do, if you give them a chance). Because, in Ottawa, it’s always just Ottawa talking to, for, and about Ottawa.

So, the 2022 federal budget will pass, sure. But on the things that matter to real people, living real lives? On the things that matter the most, like COVID and war and inflation?

On those things, the first Axis of Weasels budget did little to nothing.

Which, among other things, is why its authors are weasels.

— Kinsella was a special assistant to Jean Chretien

18 Comments


  1. Notice: Undefined offset: 180 in /nfs/c05/h06/mnt/72829/domains/warrenkinsella.com/html/wp-content/themes/warroom/functions.php on line 314
    Doug says:

    This budget should be acting on inflation…aggressively:
    -no new programs as funding existing ones already requires borrowing. With interest rates rising, the government will struggle to save the furniture
    -program reviews to identify cuts from existing programs
    -indefinite freeze on government headcount, wages and contractors
    -partial de-indexing of transfers to individuals and others levels of government

    Increased government spending only feeds the inflationary spiral and works against central bank actions to quell inflation (higher overnight discount rate and reducing balance sheet).


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      Gyor says:

      Government spending is NOT causing inflation. This inflation is caused primarily by 4 things, the break down of the supply chain, corporations using the former as an excuse to gauge costumers hence why so many are showing record breaking profits, and oil companies are refusing to drill oil, they are just sitting on permits the Biden administration has granted to them, and lastly the Russia-Ukrainian War is exacerbating all of this.

      So no, cuts to spending aren’t going to reduce inflation at all as its not the cause of inflation.


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        Ronald O'Dowd says:

        Gyor,

        Yes, you are technically correct. However, it’s global central banks who are digitizing the creation of massive amounts of currency that are solely responsible for inflation acceleration. However, it’s ultimately governments who will pay the political price for entirely refusing to reign in their various central banks. So, the buck does stop here in the end.


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        Pedant says:

        Inflation is always and everywhere a monetary phenomenon. Massive central bank money printing combined with Venezuela-esque deficits = inflation. Wealthy asset holders rejoice, wage earners starve.

        You can’t blame supply chain disruptions for the housing bubble. The government, and the Bank of Canada, can take credit for that.


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          Pat C. says:

          Of course this correct. The rest is noise.


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        Doug says:

        Government operational deficits are always inflationary as they stimulate demand. That is an indisputable fact.

        How do corporateions “gouge”? If they don’t raise prices to bring demand into balance with supply, how else would you proposed doing so (ex. government imposed rationing)?

        Oil companies aren’t drilling because ESG activism has scared off investment.

        The biggest contributor to inflation was central bank stimulus. That is largely outside government control. Spending levels are within government control. The sad reality is the only way to reduce inflation is to increase unemployment. Central banks do this my increasing interest rates. Government can do this through austerity.


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    Pipes says:

    “Parliament Hill – which is a few city blocks surrounded by reality”. Can I tell people I wrote that? I love it.


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    Peter Williams says:

    Let’s borrow our way to prosperity.

    Pay it back? I don’t think J2 understand the concept.


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    Ronald O'Dowd says:

    Warren,

    Talking about missing the mark, it looks like Housakos is now Poilièvre’s Agnew. Interesting.

    But the thing is, he takes on Charest for respecting provincial jurisdiction and respecting the wishes of people in his province. Strange, I thought in Canada and particularly in the West that fellow Canadians were big on provincial jurisdiction and the premiers who decide what’s what.

    Housakos attempts to lump in Charest with the Trudeau Liberals. What a laugh! Where’s his proof? Exactly.

    Quebec has a carbon tax and funny eh, most Canadians favour either a tax, capture and storage or carbon credits. That’s MOST Canadians. Housakos seems to have missed that.

    Housakos doesn’t like gun registeration — another policy that most Canadians support. The argument is only about how and at what government level. Again, Housakos also has missed that.

    And my God, Charest raised taxes during an economic crisis. What a radical progressive…after all no other federal, provincial or territorial government has ever done that to bring in new revenue streams.

    And finally, what about Housakos’ political judgment? Who again did he support in the last leadership race and even broke Senate rules to do it? Oh, right. Now that was bang on, wasn’t it.


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    Ronald O'Dowd says:

    Angus Reid Institute:

    https://angusreid.org/cpc-leadership-charest-poilievre/

    The Hub:
    https://thehub.ca/2022-03-25/polling-shows-poilievre-has-the-edge-in-early-stages-of-conservative-leadership-campaign/


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    Sean says:

    I just hope they find enough money to keep studying that train stop in Peterborough which has been promised by 3 MPs, 2 MPPs, 3 Mayors and 3 train companies. If they keep shoveling all that money into consultations and meetings, just imagine how many great power point presentations will be produced.


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    Derek Pearce says:

    Deeply disappointed by the meh attitude the govt is showing re meeting our NATO committments. Wtf? If ever there was a time that Canadians would be ok with a major defence spending hike this is it.


  8. Notice: Undefined offset: 180 in /nfs/c05/h06/mnt/72829/domains/warrenkinsella.com/html/wp-content/themes/warroom/functions.php on line 314
    Steve T says:

    Yes, I find it somewhat pathetic that this is what passes for “fiscal restraint” with JT and Freeland. My God, what would a truly expensive budget have looked like then?


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    Phil in London says:

    Yup this is an out touch and away from reality budget.

    What can you expect from an out of touch leadership with no compass to guide them?

    Taxing the biggest and most widely held companies in Canada has an appeal but an unintended consequence as well, many of those companies profits convert to REAL dividends and are paid to mutual funds and individual accounts held by many a middle class voter, the government calls what they are collecting as a result a dividend it doesn’t even have the balls to call a tax.

    The new housing tax free account (insert 27 letter acronym here) will have huge uptake but confusing results. There is very little detail here yet but many a person saving for a home will need to choose between the new plan and the existing Home Buyer Plan (it’s vaguely noted in the budget). The credits for new home buyers are boutique tax credits something this gang opposed when the finance minister not only wore blue but bled blue.

    The shorter term housing costs I believe will actually continue while it takes years for the new housing funds to be established and syphoned off by political friends.

    Inflation is not the enemy of this administration, it is the saviour. Ask anyone with two minutes experience in economics and they will tell you inflating an economy is the easiest way to pay for past spending.

    (Remember the longstanding joke – ask any question of a group of 10 economists and you are likely to get 11 opinions Well to this question “is inflation the easiest way to pay for past spending and you may not get 2 different answers).

    Those within the few city blocks surrounded by reality KNOW that few of us understand that economic reality.

    Covid – the country is burning or it is not burning
    War – the world is burning or it is not burning
    Inflation – the economy is burning or it is not burning

    In a related story, emperor Nero has had a quick glance in the mirror and decided it was time to order more violins for him to play while he remains in Ottawa.


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      Doug says:

      Inflation only pays for past spending if new spending grows at a slower rate. Clearly, that isn’t happening


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      Doug says:

      The bank and insurance tax will accomplish nothing as financial services is a protected industry in Canada. The oligopolies will pass on the increase taxes in the form of increased fees.


  10. Notice: Undefined offset: 180 in /nfs/c05/h06/mnt/72829/domains/warrenkinsella.com/html/wp-content/themes/warroom/functions.php on line 314
    Pedant says:

    More theft from people who pay taxes to people who mostly do not:
    – free dental care capped at $90K income; because a family earning $90K in Vancouver (average home price $1.5 million or something) is so rich
    – Internet subsidies to low income people who already get every other aspect of their lives subsidized in Canada’s nanny state

    Really no reason to be an ambitious worker or entrepreneur in Canada when the rewards for it are stolen and handed to people who don’t contribute. This is not a social safety net. It is using the middle class as cows to be milked endlessly.

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