Liberals can't douse their own economic fires
As the parent of young children, I do appreciate it when they try to clean up their mess after a long day of play. But I'm not sure how pleased Canadians will be with the Liberal cleanup efforts outlined in last week's budget after nine long years of government toying with Canada.
The budget document tabled in the House of Commons by Chrystia Freeland contains a fair few frightening numbers. There is the $54.1 billion in public debt charges, a sum projected to rise even higher over the coming years. The debt charges help to explain the projected $39.8-billion deficit in 2024-25, as does the $39.2 billion in new federal spending. Overall, the government will be spending $52.9 billion more over the next five years than outlined in last fall's economic update. If you've ever wondered how much bad polls cost, you now have your answer.
But enough of the boring bits. The star attraction of the budget, i.e., the rabbit out of the hat, was on the revenue-raising side, with the Liberals dipping their hands into the pockets of wealthier Canadians to the tune of a $19-billion hike in capital gains taxes on individuals and corporations. The government is eager to frame this as a matter of intergenerational fairness, even going so far as to suggest this is what all of those rich grandparents around the country want for their grandchildren.
What the Liberals actually are doing is robbing the increasingly sclerotic Peters to pay for the increasingly frustrated Pauls. In the war between boomers and the millennials and Genzers, the Trudeau government would like the youth of this great country to know it is firmly on their side. That's right, kids, the arsonists who have helped to torch your futures are now trying to play the fire brigade.
As long as Justin Trudeau is the one on their screens, young people won't be swiping in the right direction.
It's not likely to work. For one, young people usually are quite adept at sniffing out hypocrisy. And cringey desperation. But more importantly, the economy the Peters and Pauls are living in is itself increasingly sclerotic. Without measures to boost growth and productivity, the great government reshuffling of tax revenue is but a giant shell game. And on growth, the government has basically nothing to say, other than “here are a few sectors of the economy we like and are willing to subsidize.”
And even if the Liberals did have something meaningful to say, it's unlikely anyone but the Kool-aid drinkers will still be listening. If you want a genuine conversation on intergenerational inequity — and there is absolutely a conversation to be had after years of low productivity growth, cheap money and huge asset inflation — you need a fresh voice. The children of Canada aren't in a mood to listen to their parents anymore.
Indeed, the reason Pierre Poilievre and his lot are flying so high in the polls is because they're talking about the issues the kids want fresh thoughts on. Only they're doing it without the baggage of having run the government for the past nine years as the prospects of millennials and Gen Z have dimmed.
And so, if the Liberals want to spark a conversation about growth and intergenerational fairness, they will first have to consign their current leadership to a retirement home
(where they would undoubtedly be taxed at the new, higher rate). As long as Justin Trudeau is the one on their screens, young people won't be swiping in the right direction.
To see how a change of leader and a change of message can work to spectacular effect, the Liberals should study some history in a place they've learned to avoid: Alberta. There, in the early 1990s, Ralph Klein took over the Progressive Conservative Party from a debt-laden Don Getty and gave it a giant kick in the arse with his “Alberta Advantage.” Klein went big and his opposition ultimately went home.
But Klein is the exception, not the rule. People don't tend to vote for the arsonists, even after they turn up to the scene of their crime with a pail or two of water.