Justin Trudeau and Jagmeet Singh can rejoice. Their strategic alliance is endorsed by some 60% of Canadians. But how much will this political stability cost?
Finance Minister Chrystia Freeland will reveal it in her budget on Thursday. And the bill promises to be salty.
Enough to make voters disillusioned? The Liberals are betting that their activism and the expansion of the social safety net will be enough to win over the majority. It could be a short-sighted calculation.
Bring some programs
Already, the list of Liberal election promises is dizzying.
From health to housing to climate change, the bill amounted to nearly $60 billion over the term of office. And that is without counting the cost of a possible tax credit to finance carbon capture in fossil fuel industries, an essential technology if Canada is to hope to achieve its climate targets.
Due to the war in Ukraine, Canada has no choice but to substantially increase its funding of the Canadian Armed Forces. It would take at least $12 billion to meet our commitments to NATO.
The exercise would have already been perilous for Chrystia Freeland, now she will also have to finance the aftermath of her boss’s pact with the NPD. The exact bill is not known, but Scotiabank estimates it at between $15 billion and $20 billion over the next three years.
Think about it, that would be close to 90 billion in new spending, for a government already seriously in debt!
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No problem ?
Will Minister Freeland have the courage to curb her prime minister’s progressive enthusiasm? Many doubt it. She boasted in the Commons last week how much her government had the means to match her ambitions!
Because the stronger than expected economic growth, the rise in the price of oil and gas will certainly contribute to inflate the coffers of the State.
This is where the real political debate comes in.
Should we use this windfall to expand the social safety net and launch a host of new initiatives? Or would it not be more prudent to take the opportunity to absorb part of the current deficit of 140 billion dollars?
The Liberal Party under Jean Chrétien and Paul Martin would certainly have opted for caution. That of Justin Trudeau has always favored spending.
It is clear that the strategy has proved to be politically profitable. But for how long?
Because this government which “is there for you”, as Justin Trudeau likes to remind us since the start of the pandemic, finances its largesse with the money of the next generations. These same generations who will be faced with a titanic climate challenge, a technological shift that is accelerating.
Who will have the means to finance the response to these monumental challenges, if today’s government empties the coffers?