Long shadow of Trump lay over Morneau’s budget.
The most important vote affecting Wednesday’s federal budget in Ottawa will be in Washington, when the House of Representatives pass judgment on the Republicans’ long-promised attempt to revoke Obamacare and replace it with something they like better ( originally scheduled for Thursday, the vote has been postponed).
A positive vote would be a major victory for President Donald Trump, indicating his administration is capable of something more substantial than deranged Twitter attacks on imagined enemies. Success could offer new life to an administration in danger of sinking in its own paranoia, opening the way to other substantial business, such as tax reform and revamped trade pacts that carry immense implications for Canada’s economy. A failed vote would suggest that, even with control of the White House and both houses of Congress, Republicans can’t get their act together, further weakening an administration that already appears to be monumentally selfdestructive.
Either way, the outcome means a lot for Canada. Almost certainly more than the tepid excuse for a national financial plan that was unveiled by Finance Minister Bill Morneau. It’s only his second budget since the Liberals came to power, and already Morneau seems seized by the sudden realization that — Holy Mo ly—it turns out you can’t really borrow your way to prosperity and, if you spend all the available money in the first year of a four- year mandate, it doesn’t leave a lot of room for exciting new “investment” initiatives in the remaining years.
Having absorbed the usual outpouring of punditry reaction and analysis, I’ ve yet to come across anyone who actually liked Morneau’s document, apart from Liberal MPs obliged to applaud on cue in the same manner that so demeaned their Conservative predecessors. The press pack that was so relieved to see the back of Stephen Harper already has serious doubts about the new regime. The consensus view appears to be lots of big talk and very little substance. My favourite assessment, from one of the ever- faithful Toronto Star’s many “progressive” writers, was: “It’s not a useless document.”
Gee, really? When that’s the best you can get from the most Liberal-friendly publication in the land, you can tell the first flush of partisan bliss is definitely beginning to fade. The budget does contain a groundbreaking “gender statement,” in case you weren’t already aware that Justin Trudeau is really and truly the world’s most feminist- friendly head of government, even if he does say so himself. More so even than actual women heads of government. Does Angela Merkel have a gender statement? Theresa May? Eh? EH?
Morneau has considerably developed his skills as a politician, which were a bit rudimentary when he jumped from the private sector for the 2015 election, and doesn’t even blush any more at the campaign pledges that have been so rapidly abandoned. Where once deficits were to be limited to about $ 30 billion over three years, with a balanced budget promised by the next election, Morneau now expects to blow through that limit every year or so, for who knows how long? Finance Department calculations now foresee a surplus of $ 26.5 billion ... in 2055- 56. Between now and then is an unbroken line of red ink, doubling a debt that took almost 50 years to accumulate since Trudeau’s father set the ball rolling with his 14 deficits in 15 years, so many decades ago. Sadly, Trudeau will be in his 80s by then, Morneau will be 93, so neither may be around the celebrate the day the Liberal policy finally brings the budget into balance. But I’m sure we’ll remember them.
Morneau does plan to get back to some serious spending, just not now. Maybe later, if things work out. For example, Ottawa fully intends to start picking some targets for its huge infrastructure “investments” any month now. Based on the timeline established when the Harper government underwent this same process, we should see some actual dirt being shifted by the time the next election rolls around. By then the full effect of Trump’s still- mysterious “makeAmerica- great again” blueprint should have become evident — for better or worse — with Canada’s fortunes closely tied to the outcome. That would mean that — just as was the case with the Tories — the money will finally get spent long past the point it was deemed most effective. As former Parliamentary Budget Officer Kevin Page’s office noted recently, Ottawa has so little understanding of Canada’s infrastructure needs, “all of the extra funds being shovelled out the door may be for naught.”
If anything should be evident from Wednesday’s empty proclamations, it’s the withering uncertainty that Trump’s election has caused. No longer are the Liberals trumpeting the blue sky and clear sailing that await Canada as a prosperous future stretches to a limitless Liberal horizon. Instead Morneau is forced to warn that the treasure chest isn’t really bottomless, and that, yes, some careful control on costs may be required.
The truth is that, until Ottawa gets a handle on NAFTA, a border tax, “buy American” and other Trumpian schemes, Morneau is just guessing. Much of the world is in the same boat, but Canada’s prosperity is tied so closely to its U. S. links that any ripples will be felt here first and foremost. Maybe it’s a good thing, then, that Morneau opted to fill his budget with puffery until the smoke clears over Washington. The Liberals already have plenty of unkept promises to work on without adding new ones to ignore.