The Hamilton Spectator

Trudeau and Freeland spending plans add up

It may be that now is the time for deficits in order to best prepare for a predicted recession

THOMAS WALKOM THOMAS WALKOM IS A FREELANCE COLUMNIST FOR TORSTAR.

One thing about Justin Trudeau. He’s not spooked by deficits.

In fact, as the Liberal budget this week demonstrates, he’s willing to run deficits forever if he can come up with a plausible reason for doing so.

Some call this reckless. I find it rather charming.

It’s certainly not standard behaviour. Standard behaviour for a prime minister ready to unleash more deficits on the world is a combination of apology and explanation.

As in … I’m really sorry but we have no choice. If we run a big deficit now, we can avoid running an even bigger one later.

In the meantime, the standard argument goes, frugality is the order of the day. Cut, cut, cut. To spend money we don’t have is to engage in the worst form of fiscal wantonness. Even if the economy is running into trouble, governments must be held back from spending their way to safety.

That’s the standard argument a standard Liberal would give you.

Trudeau has never been standard. In the 2015 election campaign he was presented by his critics as someone unable to explain his fiscal stance. In fact, he didn’t care about his fiscal stance. He made a half-hearted promise to balance the books during his first term in office. But it was obvious that he didn’t mean it. Deficits didn’t worry him. He’d just spend what he had to and deal with the aftermath later.

This unorthodox approach to deficits struck a chord with voters. It seems that they weren’t focused on fiscal rectitude either.

Trudeau won the next three elections in spite of — or perhaps because of — his unorthodox approach to deficits.

So perhaps this explains the latest budget, released this week by Finance Minister Chrystia Freeland.

It contains none of the usual “anchors” designed to put a brake on spending — such as limits on the ratio of debt to GDP.

Freeland talks of making tough fiscal choices. But she doesn’t do so. And perhaps she is wise to refrain from spending cuts.

Economists predict that Canada is headed for another recession. In Europe and America, banks are coming under attack. A full-fledged financial crisis is not out of the picture.

One can plausibly argue that now is not the best time to bring spending under control. Quite the reverse. Perhaps now is the time to spend in an effort to build the economy up.

The Liberals are being pushed by the New Democrats to bring in a means-tested version of denticare. Perhaps the NDP will use its clout in this minority Parliament to promote universal pharmacare as well.

The Liberals are also proposing to use tax breaks to promote new kinds of manufacturing. One can quibble over the specific industries that could be aided. But the basic idea — using the power of government to create an industrial strategy is a good one.

However, none of these positive virtues could be realized if the government were fixated on deficits. Luckily this government is not. Trudeau has many faults. Obsession with the deficit is not one of them.

OPINION

en-ca

2023-04-01T07:00:00.0000000Z

2023-04-01T07:00:00.0000000Z

https://thespec.pressreader.com/article/281797108259693

Toronto Star Newspapers Limited