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The elements of Marc Garneau – A special report from Paul Wells

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Paul Wells has written for the Toronto Star, the National Post, and the Montreal Gazette. Perhaps most Canadians know him best for the 19 years he spend writing long form journalism with Maclean’s magazine and for his regular appearances on CBC’s The National.
Paul Wells continues to write regularly.  Click here to subscribe to The Paul Wells Newsletter.

 He was trained to admit every error. Then he went into politics. A feature interview with the retiring MP for Notre-Dame-de-Grâce—Westmount

Introduction

When you resign your seat in the House of Commons, you get to keep your phone for 90 days. The deadlines for cleaning out your offices on Parliament Hill and in your riding are tighter but still civilized. Soon Marc Garneau will leave his constituency office on the third floor of a nondescript office building in Westmount, the affluent anglophone enclave west of downtown Montreal, for the last time. But there’s no rush, so he met me there on Monday.

Trying to get politicians to speak frankly while they’re still in office is not always rewarding, It gets easier quickly once they leave. So I thought a visit with Garneau was worth the drive to Montreal, even though he’s been cagey in his remarks to journalists since he announced his retirement on March 8. I’ll cut to the chase: His interview with me wasn’t the work of a rebel either. Garneau remains a gentleman and a Liberal. He offered only praise for Justin Trudeau. But on several issues — communications philosophy; the handling of the Freedom Convoy occupation of Ottawa; and the proper attitude toward one’s own fallibility — he drew occasional sharp distinctions between his attitude and the Trudeau government’s.

I took the scenic route to get to that stuff. Garneau was the first Canadian to fly in space. He was a national celebrity before Trudeau finished high school. And while that’s a historic distinction, Garneau shares with many more parliamentarians a long career outside politics that preceded, and informed, his career in elected office. Not all of that is the stuff of every conversation, but this one was valedictory in tone. I thought it best to start at the beginning.


This is an unusually long post on the Paul Wells newsletter. I figured I owed everyone a good feature read. I’m leaving the paywall off. You can help spread word about the writing I do by sharing this with a friend or with your networks.

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1. Water

 

I began by asking him about the year and a half he spent as a combat systems engineer on the HMCS Algonquin. When he arrived on board, it was the newest destroyer in the Canadian Navy.

“It was what I had dreamt of from the beginning of my life,” he said. “My first love was the Navy.” His father’s family was francophone Quebecers, soldiers from way back. His father fought in the infantry in WWII and was posted in Germany for two years as the Cold War settled in. “I crossed the ocean with my parents in 1956 coming back from Germany,” he said. “We came back on a ship that was on its last voyage, the Samaria, and I just fell in love with the ocean. A few years later, we went back to England on the Empress of Britain. Those confirmed for me that I wanted to be in the Navy.”

The Algonquin, a big boat with 280 crew, spent three months doing exercises as part of STANAVFORLANT, NATO’s multinational Standing Naval Force Atlantic, which would pretend the Soviet Union was up to various kinds of risky business and figure out ways to respond. Off Puerto Rico he led tests of the new Sea Sparrow missile system. Around Newfoundland’s outports, the Algonquin took the province’s lieutenant governor on an annual tour.

Young Garneau wasn’t particularly interested in moving up the ranks. “I’m an engineer. I didn’t want to be the ship captain. I wanted to be the engineer that kept the equipment going. That may not sound very exciting. But for me that was exciting, because it’s quite a job to keep all that equipment operational in case you had to go into conflict.”


2. Air

Advancement for its own sake held no appeal. But when he saw a nondescript ad from the National Research Council calling for applicants for Canada’s first astronaut corps, that sounded better than a promotion. “Wow. The idea of possibly going into space just blew me away. At the same time, I thought my chances [of being chosen] were pretty close to zero.”

In May of 1983 there were 4,200 applicants. Six months later, six remained. It became clear pretty soon the program wasn’t just looking for technical expertise but for — well, for heroes. Or at least for people who wouldn’t screw up the illusion.

“They wanted us to write essays about why we thought that we were particularly well suited. Did we realize that we would become public figures? And were we ready for that? And did we think it was important for Canada? Medical [exams] like you’d never had before. Every single thing checked, because you had to be 100% fit. Then they brought us in for the last week and and they subjected us to a whole bunch of things.

“We had to give presentations in front of the selection board. Any attempted humour was met with a stone-cold face. I remember coming out of it thinking, ‘I’ve totally bombed this.’ But they’d all been trained not to react to anything.

“Do you remember somebody called Keith Morrison?” I sure do. TV reporter and anchor, CTV to the CBC to NBC. He actually interviewed me once, when that was an odd thing to do, and I remember he was good at it. “Well, Keith was hired for the week. And he put us through our paces, sort of doing the interview thing. So that was another thing they wanted to know, if you’d be able to do that. They had us in social settings, like a cocktail kind of thing. [They wanted to see] whether you were relatively comfortable in the company of total strangers, that kind of thing. So it’s a pretty thorough week. And by the end of that, they said, ‘Look, stand by your telephone between five and seven on the third of December and you’ll get a call.’ We’re 20 at that point. ‘It’ll either be to say, sorry you didn’t make it, or, you made it.’ And I was fortunate to be one of the six chosen. They called about six o’clock. They didn’t beat around the bush. ‘Look, you made it. Congratulations. Keep it private and we’ll trot you out on the following Monday.’ Which they did.”

When you know what happened next in Garneau’s career, all this prodding and profiling and media scrutiny takes on a different meaning. He started to meet prime ministers.

Pierre Trudeau: “Man of powerful intellect. Everyone knows that. There are warmer people than Pierre Trudeau. But very cordial.”

Brian Mulroney: “Mulroney had just been elected. He wanted to meet Ronald Reagan right away… I was summoned, along with two of my crew members, Bob Crippen and Kathryn Sullivan. Which, by the way, is a total no-no. You do not take the next crew that’s going to fly in three weeks out of their bubble of training and getting ready. Except if it’s POTUS. Reagan thought it was good idea, so we were summoned. I spent time in the Oval Office with with Reagan, whom I liked right away, and Mulroney, whom I also liked right away…. I was even at the Shamrock Summit a couple of months later in Quebec City. I wasn’t quite so happy with what PMO told me to do, which is to come up through the floor on a thing that was raising me up with smoke and lighting on me, dressed in my flight suit, and having to say, ‘Take me to your leader,’ which the crowd liked. And I thought, ‘I’m making a fool of myself here.’”

On the first trip, Garneau was a payload specialist, which meant he had responsibility for a suite of Canadian scientific experiments and little else. But he had two audiences he wanted to please. NASA was the first. “I had to make a good impression so that, based on a sample of one, they’d say, ‘Okay, he did pretty well. Let’s keep inviting Canadians to fly.’ And quite a few Canadians have flown.”

Canadians were the second audience. “I wanted Canadians to be proud of me.”

Both audiences gave him the thumbs up. Today there’s a high school in Toronto named after him. In 1992 Garneau and Chris Hadfield reported for training to become mission specialists, with much broader responsibility for mission success. It took another year of training before Garneau was eligible for his second flight, in 1996. His third and final mission was at the end of 2000. There were Russians waiting at the International Space Station when the shuttle Endeavour delivered Garneau and the others. Relations with Russia were as warm as they’ve ever been. “It was more than cordial. Frankly our lives depended on one another.”

It was a longer acquaintance with higher stakes than most of us ever experience. “One of the things I loved the most about NASA was that if you fuck up” — he paused before using the salty word — “you confess. That is the culture there.”

Probably this does not need to be spelled out, but here goes anyway. This culture of honesty was not a simple preference. Shuttle crews rode a lake of liquid fuel and twin towers of solid fuel at speeds their own ancestors could not have imagined. If a bug slipped into the system it could kill them and set spaceflight back decades, as indeed it did, twice. Owning up to error was the primary method of keeping colleagues, and the dream of spaceflight, alive.

“I did hundreds of simulations. I was the first non-American CAPCOM ever. CAPCOM’s the guy who talks to the crew in orbit for Mission Control. And we did hundreds of simulations. I covered 17 missions, just as CAPCOM. And after every simulation, where the crew, perhaps, had not picked up the problem and had not reacted properly to it, we’d do a post mortem.

“And that culture of honesty and openness, which you absolutely need in the space business — you can’t have people making excuses or trying to hide things — that’s what I love the most. And I wish it existed in all facets of life, including the one I ended up in.”


3. Earth

 

Garneau first ran for Parliament in 2006, just west of Montreal Island, and lost, in the first of three elections when losing was most of what Liberals did. He was interested in Outremont in a 2007 by-election. So was Justin Trudeau. Stéphane Dion was the leader, though, and he thought a political scientist was just the ticket. Dion’s designated nominee, Jocelyn Coulon, did not fare well.

In 2008 Garneau inherited the Liberal nomination, essentially a Wonka golden ticket, in Westmount, as solid a Liberal fortress as any in Canada. Only a catastrophe could lose Westmount for the Liberal. In 2011 it almost happened — Garneau beat the New Democrat by only 642 votes in the party’s worst national defeat in since Confederation. Soon Peter C. Newman had a book out proclaiming the Liberals were history.

“There’s something intimate about being only 33 [MPs in the Liberal caucus], Garneau recalled. “We got to know each other in a kind of a relationship that you don’t get when you’re 150 or 160. So I really enjoyed the collegiality of having that small, small group. Although of course I was hoping it wouldn’t last too long.”

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In 2013, Garneau, who hadn’t been interested in commanding a ship, decided to try his chances with a political party. He ran for the Liberal leadership. He had competition.

“I personally believe that I had good policy that I put in the shop window. What I didn’t have — what I still don’t have — is charisma. I’m not interested in charisma, by the way. I’ve lived my life very well without charisma. And I’m not saying the electorate chooses on a superficial basis. But there was something about Justin Trudeau that was incredibly appealing to people.”

Garneau bowed to the inevitable and dropped out of the race. Eighteen months later he was co-chair of the Liberal Party’s “International Affairs Council of Advisors,” with a threefold mission: Figure out the party’s foreign policy; teach foreign policy to a leader with extremely limited experience in the field; and be seen showing interest in foreign policy. The group met regularly. “Trudeau only came occasionally to meet everybody and to sort of stir stir things up and have a really good discussion,” Garneau said.


4. Fire

As co-chair (with Andrew Leslie) of Trudeau’s Council of Advisors, Garneau figured he had a good chance to become foreign minister. He got Transport.

“You know, I’ve lived 17 years of my life abroad. And I love foreign policy. I wasn’t expecting Transport. And it turned out to be a job I loved. Although at first I thought, ‘Why’d he put me in transport?’

“When I got the call that, you know, ‘The Prime Minister wants to meet you,’ I thought — This is after the vetting process, ‘Are there any skeletons in your closet?’ — I thought, ‘What’s he going to put me in?’ I thought, Defence because of my background. I was in the regular forces. Or I thought, then, maybe Industry, because I was the president of the Canadian Space Agency and I worked for the Minister of Industry, Science and Technology at the time. And maybe even Foreign Affairs, because he’d had me in this job for the past two years. I wasn’t expecting Transport.” Garneau chuckled at the incongruity of it. “But now, after a little while, I saw the logic of it. I was in the Navy, ships, so I know the marine environment. I know the air environment. And so there is a certain logic to it. And it’s a job that I came to love.” He held the post for five and a half years. Only David Collenette and Lionel Chevrier lasted longer.

The new governing caucus had five times as many MPs as the Liberal caucus it replaced. “It was a heady experience,” Garneau said. “And there was a certain amount of chaos, which is understandable because it takes a couple of years to learn the basics of your job.”

It must have been a management challenge for the Prime Minister’s Office, I ventured. To have a finance minister, health minister, justice minister, defence minister who’d never been Members of Parliament before, let alone cabinet ministers. How did the PMO handle that? “It was a little bit like when you see kindergarten children all tied up with ropes, going down the street.”

Did the control ever chafe? “I had some times where I felt one way and and I felt that the centre did not necessarily agree with it. Yeah. That comes from the dynamic. If you’ve got your mandate letter, and you interpret that mandate letter the way you feel it must be implemented — you know, the vast majority of the time, no problem. But there was the odd occasion. You’ll forgive me if I don’t go into details on it. But I was very conscious of the fact [that] you have a chief of staff, your chief of staff is a key person for you. But that chief of staff reports to you, but also must report to the chief of staff of the Prime Minister. I made an indirect reference to it in my parting speech, that I sometimes made their life difficult because I might have wanted to go one way whilst the center didn’t necessarily want to go that way.”

We had been talking for more than an hour. I asked Garneau about the Freedom Convoy of January and February 2022, which has been on my mind. Specifically, I asked Garneau about his Liberal caucus colleague Joël Lightbound, who held an astonishing news conference in the second week of the Ottawa siege to say the Liberals’ COVID policy “stigmatizes and divides people.”

“I definitely took very much note of it,” he said of Lightbound’s surgical sortie. “Some of what he said is true. There were people on the Hill that were not extremists. They were just there because they felt that their rights were being not respected.” He faced his share of verbal abuse as he made his way to and from the Hill, but even still —

He paused. “I’ll be very candid. I don’t think we handled it as well as we could have.”

In what sense? “I think there was a sense that, ‘We’re not going to talk to you people. You’re just a bunch of troublemakers.’ I had always been brought up to not avoid dealing with difficult issues. This was an incredibly difficult issue.” Another pause. “So that’s just my personal comment.”

The other thing I wanted to ask him about was the tremendous controversy he and two other back-bench Liberals have stirred up over the interaction between Quebec’s newly beefed-up language law and Bill C-13, which proposes amendments to the federal Official Languages Act. This has put Garneau and his colleagues squarely on the side of Montreal’s anglophone population against a majority of Quebec’s elected politicians. And it’s brought Garneau in for some unaccustomed criticism. Barely two weeks before he resigned, he was complaining about the rough ride from Quebec commentators on Twitter.

Twitter avatar for @MarcGarneau

Marc Garneau @MarcGarneau
Quand Michel David du Devoir, une personne que je respecte, me traite de colonisé ou d’angryphone, je trouve ça irrespectueux et triste. Peut-on être respectueux l’un envers l’autre même si on ne pense pas de la même façon?

12:40 PM ∙ Feb 18, 2023


271Likes39Retweets

Garneau’s comments on this were long, and would constitute inside baseball for most readers outside Quebec, but he didn’t like seeing Quebec’s language laws incorporated by reference into a federal bill. “I have very rarely disagreed with my party, but I disagreed with them on that.” It got worse for Garneau when he read 88 amendments introduced by the Bloc Québécois, five of which said that in case of a conflict between federal and provincial legislation, Quebec’s should predominate. Those amendments were eventually rejected, but by then Garneau was already on the record with his concerns. “I’m always ready to face criticism, but it got personal. And I think that’s sad.”

The controversy has been a much bigger deal inside Quebec than outside, but Garneau insisted it’s not why he’s leaving politics.

The reason I’m leaving is because I made that promise to my wife, and to my family. I actually told him after the 2019 election that that was my last election. I had been reappointed to Transport. And I thought, ‘Okay, this is a lovely way to finish.’

“Then in January of 2021, to my great surprise, the Prime Minister [shuffled Garneau.] I think it was motivated by the fact that Navdeep Bains pulled out. The Prime Minister, I personally think that he said, ‘Okay, I want François-Philippe to take over from that. And there’s a bit of musical chairs and I ended up in foreign affairs.

“But seven months later, an election was announced. And I felt, in all good conscience, that after seven months in that portfolio — to now say, ‘Sorry, I’m leaving,’ when I had been the fourth appointed in under six years, it just wouldn’t have been right.

“Now, if the prime minister had told me, ‘Mark, after this election, you won’t be in the cabinet,’ I wouldn’t have run. But he didn’t tell me that.

“I ran hoping to go back into that job. Because Lord knows there were things that I wanted to do. With respect to Afghanistan, China, the Indo-Pacific strategy, I’d been working all that stuff. But the bottom line was that he said, ‘You’re not in cabinet anymore.’

“And so, at this point, I felt it would be really not acceptable for me to say, ‘Okay, thank you for electing me three weeks ago, I’m leaving.’ So I felt I needed to put in some time. To my great personal satisfaction, I was given two things that I really enjoyed. One was to be chair of the Indigenous and Northern Affairs Committee, which I think has an important role with respect to reconciliation. And the other one was kind of unexpected… medical assistance in dying, where I was co-chair with a senator on this special mixed committee.”

That committee presented its final report in February. Garneau resigned three weeks later. He was already in the history books before he ever ran for office. Would he run now, in the atmosphere of today’s politics, if he were just starting out? Is there still room in politics for an engineer who just wants to make things work better? These are eternal questions, and I had already asked Garneau enough questions for one day.

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Claiming the Carbon Tax is Not Inflationary Defies Belief – So Do Media Reports About Inflation

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From EnergyNow.ca

By Jim Warren

Back in March 2019, the average price for a pound of lean ground beef at five major chain grocery outlets in Regina was $4.71. In September 2024 lean ground at the five big chain outlets averaged $7.90 — a 68% increase over the past five years…  these price increases are a far cry from the official statistic for accumulated inflation of 21% over the same period.

Kudos to the Canadian Trucking Alliance (CTA). They have provided us with some valuable insight into the inflationary effects of Canada’s carbon tax.

This past August, the CTA published a brief to the federal government which among other things called for a moratorium on the carbon tax for diesel fuel.

In commenting on the brief, CTA president Stephen Laskowski said, “The carbon tax on diesel fuel is currently having zero impact on the environment and is only serving to needlessly drive up costs for every good purchased by Canadian families and businesses. The carbon tax needs to be repealed from diesel fuel until viable propulsion alternatives are available for the industry and the Canadian supply chain to choose from.”

The CTA estimates that as of 2024 the carbon tax on diesel adds an extra cost for long-haul truck operators of $15,000 to $20,000 or around 6% of per truck in annual operating costs. The brief to government claims a small trucking business with five trucks, “is seeing between $75,000 and $100,000 in extra costs due to the carbon tax.”

Obviously, truckers striving to remain solvent will be doing their utmost to pass carbon tax costs on to their customers. If the cost of the tax can’t be recouped by some trucking companies, we can bet there will be fewer of them operating over the coming years. As Laskowksi said, the carbon tax increased the cost of virtually every product transported by truck—which means  pretty well every physical good consumers purchase.

In light of the political beating the Liberals have been taking over the carbon tax, the Trudeau government has taken a tiny feeble step toward relieving the pressure on businesses. In October 2024 federal finance minister Chrystia Freeland announced the government’s intention to provide carbon tax rebates to businesses with fewer than 500 employees. That means many of Canada’s trucking companies will be eligible to recoup some of the carbon tax they have been paying since fiscal 2019-2020. Freeland says the cheques will be in the mail this December.

It sounds okay until you look at the fine print.

The payments will not reflect the amount of fuel a business uses or how much carbon tax it has paid over the past five years. The rebates will be based on the number of people a company employs and will be paid only in provinces where the federal fuel charge applies. An accounting business with 10 employees will receive the same carbon tax rebate as a small trucking business with 10 employees. A CBC news report pulled the following example from Freeland’s press release, “A business in Ontario with 10 employees can expect to receive $4,010…”

Freeland boasted, “These are real, significant sums of money. They’re going to make a big difference to Canadian small business.”

Freeland’s statement is patently false when it comes to trucking companies.

Let’s say that the 10 employee business is a long-haul trucking company based in Ontario. After paying the carbon tax on five or more trucks for five years, the business would receive a paltry $4,010 rebate. That light dusting of sugar won’t make the carbon tax any more palatable to the trucking industry. According to the CTA’s estimates, if the 10 employee long-haul trucking firm had just five trucks the carbon tax will have cost it approximately $400,000 in operating costs over the past five years.

Carbon tax costs are not the only inflation related frustration affecting Canadians. The way the federal government and its friends in the media describe inflation presents people with a warped view of what is happening to the cost of living. Media reports on inflation rarely reflect the lived experience of people trying to pay the mortgage, feed their families and drive to work.

Governments, and their media apologists, in both Canada and the US have been taking victory laps over the past year because the rate of inflation has decreased. It’s as though people have nothing to worry about because the cost of living this year isn’t increasing as fast as it was last year. Changes in the inflation rate may be important for statistical purposes but they don’t reflect reality for people who have been coping with increases in inflation over several years. Most people measure the difficulties caused by inflation by comparing how much more things cost today than they did three to five years ago. The figure regular civilians, as opposed to statisticians, use to assess increases in the cost of living is accumulated inflation. However, we still need to be cautious about the accumulated inflation rate that we get when using government data.

If we calculate the rate of accumulated inflation based on official annualized inflation rates from 2019 up to the midpoint of 2024. The accumulated increase over that five year period is around 21%. And, it is true that this number better reflects people’s perception of inflation than a statistical comparison indicating the rate of inflation fell from 3.9 % in 2023 to 2.61% by the mid-point of 2024. The problem is the 21% number still does not accurately reflect increases in the cost of many necessary goods and services that are impacting households. This is why according to political polls voters in Canada and the US aren’t buying government propaganda when it comes to inflation.

The economy, and by extension, the high cost of living was a major issue in the recent US federal election campaign. The Democrats did not do themselves any favours claiming Bidenomics had wrestled inflation to the ground simply because it wasn’t increasing as fast as it was a year ago.  A large number of voters in the US embraced former US president Lyndon Johnson’s maxim, “Don’t piss on my leg and tell me it’s raining.”

But wait, it gets worse. The basket of goods and services the Canadian government uses to calculate the cost of living index and the inflation rate fails to identify high increases in the prices for specific household essentials including many grocery staples. Similarly, official calculations for statistically weighted national average consumption of various products used to calculate the Consumer Price Index are skewed in favour of big urban centres. Montreal, Toronto and Vancouver are over represented. There is no way that the average annual consumption of gasoline for a household in downtown Montreal comes anywhere close to the amount used in most of Canada where public transit is scarce and distances are great. The result is the official accumulated inflation rate fails to show what many people are experiencing in most regions of the country.

Here is a good example of how published statistics don’t reflect the inflation shock that consumers experience at the grocery store.  Back in March 2019, the average price for a pound of lean ground beef at five major chain grocery outlets in Regina was $4.71. In September 2024 lean ground at the five big chain outlets averaged $7.90 — a 68% increase over the past five years. The price of rib eye steak increased by even more. Rib eyes averaged $14.91 per pound at the five stores in Regina in March 2019. This September, the average price for rib eye steak was $29.40 – a 97% increase over five years. Obviously, these price increases are a far cry from the official statistic for accumulated inflation of 21% over the same period. (FYI: the data presented here was derived from  Beef Business magazine published by the Saskatchewan Stock Growers Association. Each bimonthly edition of Beef Business features a retail beef price check)

Assuming we can find similar rates of accumulated inflation for other staples like dairy products and fresh vegetables it’s no wonder smart shoppers have been incensed over what’s going on with grocery prices and the cost of living (not to mention price increases for fuel, rents house prices and mortgage interest). Consumers have discovered today’s prices of $6.50 for a four litre jug of milk and $7.00 for a pound of butter aren’t going to be reduced simply because the rate of inflation has decreased form 3.69% to 2.61% over the past year. Using history as our guide, with the exception of rare periods of deflation such as the depression of the 1930s, it is unlikely we’ll see the price increases of the past few years come down other than for sales or loss leader strategies. And, while a 72 cent dollar might boost sales for some of our exports, it will add more than 25% to the cost of imported fruit and vegetables this winter,

Furthermore, the impacts of inflation are being more severely felt by Canadians today than they would have been a decade ago. This is because our per capita national income (using GDP as a proxy for national income) has been shrinking since 2014. That was the year oil prices fell into an eight year depression and the last full year before Justin Trudeau became Prime minister.

According to a 2024 Fraser Institute Bulletin authored by Alex Whelan, Milagros Placios and Lawrence Shembri, “Canadians have been getting poorer relative to residents of other countries in the OECD [a club of mostly rich countries]. From 2002 to 2014, Canadian income growth, as measured by GDP per capita, roughly kept pace with the rest of the OECD. From 2014 to 2022, however, Canada’s position declined sharply, ranking third lowest among 30 countries for average growth over the period.”

Canada’s per capita GDP/national income for 2024 is projected to be $54,866.05. According Whelan, Placios and Shembri, that is lower than per capita national income in the US, UK, New Zealand and Austrailia.

Only one US state, Mississippi, the poorest state in the union, has a per capita GDP/national income less than Canada’s. Mississippi’s total is $53,061. Other states considered poor by US standards such as Alabama and Arkansas have higher per capita GDPs than Canada. On average, Canadians have increasingly less money with which to buy more expensive goods and services.

The challenges Canadians have faced as a result of the high cost of living have coincided with the eight plus years that Justin Trudeau has been prime minister. The decline in per capita national income also occurred under Trudeau’s watch—in conjunction with Liberal policies designed to stifle growth in Canada’s petroleum and natural gas industries. What did the Trudeau Liberals think would happen to growth in per capita national income after they handcuffed our single most important export industry?

In the final analysis it’s a tossup. Do we have an inflation problem or is inflation just a symptom of our Trudeau problem?

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Canadians should expect even more spending in federal fall economic statement

Published on

From the Fraser Institute

By Jake Fuss and Grady Munro

The Trudeau government will soon release its fall economic statement. Though technically intended to be an update on the fiscal plan in this year’s budget, in recent years the fall economic statement has more closely resembled a “mini-budget” that unveils new (and often significant) spending commitments and initiatives.

Let’s look at the data.

The chart below includes projections of annual federal program spending from a series of federal budgets and updates, beginning with the 2022 budget and ending with the latest 2024 budget. Program spending equals total spending minus debt interest costs, and represents discretionary spending by the federal government.

Clearly, there’s a trend that with every consecutive budget and fiscal update the Trudeau government revises spending estimates upwards. Take the last two fiscal years, 2023/24 and 2024/25, for example. Budget 2022 projected annual program spending of $436.5 billion for the 2023/24 fiscal year. Yet the fall economic statement released just months later revised that spending estimate up to $449.8 billion, and later releases showed even higher spending.

The issue is even more stark when examining spending projections for the current fiscal year. Budget 2022 projected annual spending of $441.6 billion in 2024/25. Since then, every subsequent fiscal release has revised that estimate higher and higher, to the point that Budget 2024 estimates program spending of $483.6 billion for this year—representing a $42.0 billion increase from the projections only two years ago.

Meanwhile, as spending estimates are revised upwards, plans to reduce the federal deficit are consistently pushed off into later years.

For example, the 2022 fall economic statement projected a deficit of $25.4 billion for the 2024/25 fiscal year, and declining deficits in the years to come, before reaching an eventual surplus of $4.5 billion in 2027/28. However, subsequent budgets and fiscal updates again revised those estimates. The latest budget projects a deficit of $39.8 billion in 2024/25 that will decline to a $26.8 billion deficit by 2027/28. In other words, though budgets and fiscal updates have consistently projected declining deficits between 2024/25 and 2027/28, each subsequent document has produced larger deficits throughout the fiscal outlook and pushed the timeline for balanced budgets further into the future.

These data illustrate the Trudeau government’s lack of accountability to its own fiscal plans. Though the unpredictable nature of forecasting means the government is unlikely to exactly meet future projections, it’s still reasonable to expect it will roughly follow its own fiscal plans. However, time and time again Canadians have been sold a certain plan, only to have it change dramatically mere months later due to the government’s unwillingness to restrain spending. We shouldn’t expect the upcoming fall economic statement to be any different.

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