The PM is running out of other people's money

Budget hurts our most productive citizens, Rahim Mohamed writes.

Margaret Thatcher once said “the problem with socialism is that you eventually run out of other people's money.” The Trudeau government, as it unveiled its ninth federal budget on Tuesday, seemed intent on testing the truth of that theory, behaving as if there were endless pockets to pilfer.

As expected, Finance Minister Chrystia Freeland's Tuesday afternoon budget address spelled bad news for some of Canada's most productive and entrepreneurial citizens, outlining forthcoming tax hikes on corporations and high-income Canadians — notably ratcheting up taxes on capital gains accrued from investment assets like secondary residences.

The 416-page budget document tabled by Freeland on Tuesday was unambiguous about the reasoning behind these redistributive measures, reading: “To grow the middle class and invest in younger Canadians — while keeping their taxes lower — new generational investments in Budget 2024 will be supported by contributions from the wealthiest Canadians.”

Freeland said on Tuesday that the new taxes were necessary to allow the Trudeau government to deliver on its promised social policies, including a new school lunch program announced at the start of the month. The new tax revenues will undergird $39.2 billion in net-new spending as the next federal election draws closer.

The hours leading up to the 4 p.m. ET budget announcement were filled with a palpable sense of foreboding, with news breaking on Tuesday morning that tax hikes were coming for better-off Canadians and job creators. This, despite Freeland fielding a slew of last-minute appeals from economists and members of the business community to pivot to a more pro-growth direction.

The Trudeau government's stubborn refusal to budge from its tax-and-spend dogma has had even reliable Liberal backers publicly voicing their disapproval in recent days.

Ex-Bank of Canada Governor David Dodge, a Jean Chrétien appointee and one-time advisor to NDP premier Rachel Notley, said on Monday that the Trudeau government was moving in “exactly the wrong direction” on fiscal policy.

Dodge speculated to interviewer Vassy Kapelos that Tuesday's budget was likely to be the “worst budget since the (Allan) MacEachen budget of 1982,” which was hated by business and labour groups alike for its unappetizing combination of wage restraints and tax increases.

In what might be an interesting bit of foreshadowing, the hated MacEachen budget dropped about a year-anda-half prior to then-prime minister Pierre Trudeau's February 1984 walk in the snow. Trudeau the younger finds himself in similarly dire straits with the next election expected in October 2025, just under a year and a half from now. The sins of the father, namely vanity and fiscal profligacy, now look almost certain to spell Justin Trudeau's demise.

But then again, the “foreshadowing” of the present fiscal calamity has been visible for more than a decade. Even before becoming prime minister, Trudeau exhibited a total nonchalance toward debt that could only have come from someone who's never in his life had to worry about money.

“The commitment needs to be a commitment to grow the economy and the budget will balance itself,” Trudeau famously told CPAC's

Peter Van Dusen during his response to the Harper government's 2014 budget.

The Liberal upstart would sweep into power the next year on a platform of running three consecutive budget deficits, assuring Canadians that historically low interest rates would shield them from the consequences of his spendthrift ways. Now was the time, Trudeau insisted, for the federal government to spend lavishly on big-ticket infrastructure projects and other worthwhile pursuits.

Nine years and nine consecutive budget deficits later, Trudeau has little to show for the orgy of spending. The promised infrastructure upgrades never really materialized — heck, the trains aren't even running on time in the federal government's own backyard of Ottawa. Those historically low interest rates, meanwhile, have done a vicious U-turn, forcing the federal government to turn hat-in-hand to Canada's entrepreneurs and job creators.

With Freeland, for now, urging those affected by the tax hikes not to “complain too bitterly,” it's worth asking where the debt-addicted Trudeau government goes from here.

With the credit taps starting to close and high-income Canadians now in the government's crosshairs, it's only a matter of time until Trudeau and company look to the pockets of everyday Canadians to feed their addiction.

After all, this is a government that's spent other people's money willy-nilly for the past nine years and it's not about to stop now.