At Issue - The costs of Carney's spending plans

Episode Date: May 1, 2026

What Mark Carney's spending goals outlined in the spring economic update mean for the deficit. Conservatives battle Liberal efforts to move committees behind closed doors. And how will Carney's new sovereign wealth fund help Canadians? Rosemary Barton hosts Chantal Hébert, Andrew Coyne and Althia Raj.

In Carol Claire Burke's new novel, a modern-day tradwife influencer wakes up in the 1800s and has to live that tradwife life for real. No running water, no electricity, and no way out. We get into tradwives and way more on my podcast bookends. This idea of a woman who prioritizes her children, prioritizes her marriage, who is subservient in many ways, has become kind of a fixation in our politics and in our culture. Check out that conversation on book. with me, Matea Roach, wherever you get your podcasts. This is a CBC podcast. Hey there, I'm Rosemary Barton this week on Ad Issue, the podcast edition for Thursday, April 30th.

I think Canadians have seen that we are a serious fiscal manager. Canada has a solid financial position. Carney's double Trudeau's deficit from $31 billion to $65 billion. What's changed? More cost? More debt? This week we're asking, do Canada's investments in defense spending and skilled workers justify the size of the deficit? Plus, the conservative raise issues with committees, closing the door to public debate.

So what's to be made of where Canada is spending its money and does it justify the size of the deficit now? I'm Rosemary Barton. Here to break it all down tonight. Chantelle Iber, Andrew Coyne, Elthia Raj. So we were debating before whether we would make Chantal go first because she didn't. She wasn't. She wasn't with us on Tuesday. Out of kindness, I will go to Andrew first, because Andrew always has a lot to say about budgets.

And now that we're a couple days after, I wonder whether you've thought any more about where the spending is directed and the fact that a lot of it is still deficit spending. And that is the key criticism of the conservatives. Well, yeah, and it's more spending than the liberals precededly, more than Justin Trudeau ever spent. It's more than they promised to spend in the fall budget. So every time the liberal government, whether it's Trudeau or Carney, issues a new forecast or a new statement of the thing, they always, the spending limits always seem to be nowhere in sight. They just simply spend more.

They simply upgrade their objections every six months. This time, they didn't increase, you know, in previous budgets or statements, they would increase spending from six months before by $10 or $20 billion a year. This time they held it to like $6 to $8 billion. So they took virtually all of the fiscal wind from higher oil prices and spent something like 97% of it and asked to be congratulated for their fiscal discipline.

Look, it could be a lot worse. There's not a lot in this budget, in this statement, I should say, or this update that's bad or that's going to take us in the wrong direction. There's just not a lot that's going to take us in the right direction. There's just an overall sense of complacency. The government seems quite happy with economic growth of 1.7% per year at infinite. It seems quite happy to be running deficits of 2% of GDP six years after the last recession. So at the top of the business cycle, it's, you know, the fastest growing spending on him in the budget is not for health or defense or anything else. It's interest on the debt, which a lot so long ago was $0.6 in every dollar is now headed for $12 or $13 in the dollar, $80 billion dollars five years from now.

this is it's not a crisis let's say it's not an emergency but it's a far to a high degree of complacency in the face of gathering storm clouds okay so i started with the right person is my point so let me go let me go to chattel now uh because we haven't heard you yet what what do you make of what you saw and what andrew's saying there some of the things that that should be put you know maybe orange flags if not red flags so uh looking for from some distance forward I think this fiscal update was kind of a return to some normalcy in the sense that fiscal updates over the Trudeau era were almost new budgets. This was not the case, which to many people makes it more boring. But otherwise, I thought, you know, that all week I was hearing the chains of a ghost rattling in the background,

and that ghost would be called Paul Martin. And why do I say that? and I'm not going into the numbers. I'm going into the perception and politics. When Mark Carney became prime minister, given his credentials, I think a lot of people expected a virage, some resetting of the way we handle fiscal policy.

And he did say in an earlier scrum some months ago, this will be about austerity, which I don't think Andrew found, and I didn't find that either. But back last November, people talked, well, the government is still a minority government, so there's not a big shift. What this fiscal update actually did is it kind of seemed like a prolongation of the Trudeau era. You've got room to maneuver, and you do not use it for rigor or austerity, whatever you want to call it. You use it to spend on something else.

And I think on that score, the update failed on expectations of more rigor. So I wonder what you make of that, Althea, because I think both of our colleagues here are right. And I wonder if that means that the austerity is to come, that this is sort of the transitional document. I don't know. What do you make of those ideas? I had no expectations, so I was not disappointed. Why? How smart of you, yes, yes. It's kind of sad, though.

You can see in the back of the fiscal update that they have renewed program funding for one year in a bunch of different areas. So there were a bunch of programs that were going to sunset at the end of March, and it seems like temporarily renewed them while they reviewed them. So to your point about austerity, it could be coming. I mean, already you hear in the public service

that there are a lot of cuts and a lot of. lot of, even outside of Ottawa, regional offices that will be seriously impacted. So I do think there is an argument to be made that there is austerity. I mean, we talked about this on Tuesday, but I was surprised to see no mention of pharmacare in this document whatsoever when you have at least two provinces that have seriously asked the government to sit down at the bargaining table to have the same plan that has been offered to say the Yukon or Manitoba. There is no extra money for childcare.

There is no extra money for mental health or long-term care. There's also things that, frankly, would have gotten huge headlines in the Stephen Harper era, this idea of privatizing airports or ports and selling that off to potentially, you know, foreign capital foreign assets. So I think there's quite a bit in here. I think politically this document is also interesting. Not because it's an election document. It's obviously not an election document.

But where they have chosen to spend money is basically where Pierre Paulyev has gone courting votes. So yes, on the gas tax, that's a huge chunk of the update, but also on the skills trade. You know, Dan Arnold, the liberal's former pollster, who is now at Polera, had some interesting data where he showed that millennial men are now coming to Mark Carney. And you can see a consistent effort to court the male vote.

And I don't think this update is not political in that sense. I think it's quite a political document. Of course it is. But I still think, and I was looking at the parliamentary budget officer's initial comments on it, it is vague to the point of lacking in accountability. There is no measure of anything. in there. And I know we're going to get to that wealth fund at some point, but it would help if the government provided guidelines as to what anything that it does is meant to accomplish. I also think

that there's a crowd out there that will still hope or wait in the fall for the equivalent of the 1995 full Martin budget, a budget that kind of resets the way that you budget. And, and, and And at this point, that has not happened. Last minute to you, Andrew. Well, you sort of wonder if not now, when. You know, you've got your majority. You're only a year into your government. So you've got lots of time left to recover if you have to do something that's politically unpopular.

So this would be, conventional wisdom would say, when you were going to do your tough budget if you were ever going to do it. So the fact that they're not suggests that it's unlikely to get any tougher from here. But you can see how we become prisoners of expectations. You know, merely that because they didn't push spending to the outer limits of what Justin Trudeau might have dreamed of doing, doesn't mean we have an austerity budget. In real per capita terms, they're going to be spending this year upwards of $10,500 per person after inflation, 10% more than the Justin Trudeau government did on average, 20% more than the Stephen Harper government did on average.

So 20% more dollars after inflation per citizen is, It's not my definition of austerity. I don't think it's anybody. Okay, we're going to leave that conversation there. We'll come back and Althea, you'll start us off. We'll take a look at the conservatives pushing back on the liberal forcing committees behind closed doors. Are the liberals stifling debate or just using the powers of their new majority? That's next.

As we have a number of studies to consider and we want to be working well together as a team, I would like to suggest that we move in camera. We should let us have our discussion because we will not be silenced. had where one liberal member has occupied the committee business for how long and to simply be trying to close off and to bring. And I appreciate it. Committees are masters of their own agenda. We discuss issues every day. There's going to be lots of debate. I can assure you. So what's been made of the pushback, committees going in camera, closing the doors, not letting the public see the debate. Let's bring everyone back, Chantal,

Andrew, and Althea. And I'm not suggesting that the public is all sitting there watching committees all day. But when we were talking about this in this bureau this week, Aaron Werry reminded me that we saw a very similar pattern during the Harper era, Harper majority. A lot of this happened. And the conservatives are pretty angry. It's happened four times this week in four different committees, Althea. What do you make of it and what does it tell you?

It's not just that the public cannot see what is happening. We journalists cannot see what happening. There's actually no historical record of what has happened. There's no transcript of what happens behind. closed doors. So this is a reason why last week when we first talked about this, I said I thought I was a bit rich, I don't remember exactly my words, but that the liberals had added two liberals to every committee. And basically the liberals have given themselves the power to take over committees. So the opposition doesn't even have the tool of like walking out and trying to prevent quorum from

happening. The liberals can do whatever they want. And so the ominous, frankly, is on liberal MPs. They have a responsibility. They are not there to do the bidding of the government. They are there to represent their constituents. They're actually there to hold the government accountable. They are not members of the executive. Cabinet ministers don't sit on parliamentary committees. And so they also need to serve as a check. Now, I understand, the conservatives have used committees to grant guise themselves, to put clips on social media, to fundraise. Sometimes, They've been quite obstructionist, but some of the things that they suggested this week are entirely reasonable. You know, like for example, requiring PCO to provide regular updates on the Prime Minister's ethical screen on Brookfield,

that seems entirely reasonable. And as Justin Truder used to say, sunshine is the best disinfectant. So why are they, why would they, I mean, what would be the point of this tactically, Chantal? Like I just don't understand why, if you've got your majority, and you have control of the committees, why the committees can't just do their work so that people know what they're doing. So government insiders tonight would have you believe that all of a sudden in what four committees, liberal MPs woke up with a personal initiative to do this. I find that very hard to believe.

No kidding. It's like the light came on in every brain at the same time. But in any event, this is a dangerous thing to do for the government. I'm not going to go into accountability, but rather in this is a government that has a very fragile majority, one that can be questioned by some on legitimacy. There will be by elections. If you are going to spend the time between now and them convincing Canadians that the reason you wanted a majority was to shut down debate, good luck because one day you will start losing seats

and at some point you will lose that very fragile majority. So of all of the things you can think that we're smart to do this week, getting a majority and using it to do this is probably one of the dumbest moves that one has seen in a long, long time. Yeah, there's two, there's at least two by-elections, right? Jonathan Wilkinson now on the West Coast and Alexandreoultris. And maybe Nader's can submit, we'll see. Yeah.

Yeah, so, but there might be others, but this is a party that lost writings like St. Paul's in Toronto and writings in downtown Montreal not that long ago. So the notion that they are suddenly sheltered from anything that they do, that would have no consequences, is really short-sighted. Andrew, what do you make of it? Well, of course, that's precisely why they wanted the majority was to do things like this. so there's only revealing what was actually true. You know, this government, even as a minority, was in no danger of falling, not when you're 15 points ahead in the polls. The issue was, how fast could you ram stuff through Parliament?

And for that, you need control of the committees. It is one of the more visible comments of recent times is Stephen McKinnon saying that the committees are masters of their own agenda. I don't think five-year-olds believe that anymore. So, yeah, so at this point in particular, I think is worth restating. It's not just MPs in general, it's government MPs in particular who are abstaining from their proper role as watchdogs on the government. I know it's been a long time since MPs on the government side of any stripe have actually done that. But this is a big part of the problem with our system right now is there's really no effort to hold the government to account on the government side at all.

They really do see themselves as foot soldiers for the government agenda. So do the opposition MPs for their party, but at least the opposition's role. role is to expose government wrongdoing and to question government misdeeds. That's, it may be a partisan objective, but it serves the public interest to have that done. It's not that this is terribly new, as was mentioned, this is the sort of thing you saw under the Harper government. The difference here is not conservative versus liberal. It's majority versus minority governments.

This is why I'm not a huge fan of majority governments. Is any kind of accountability goes out the window. It's hard enough under minority governments. We've seen under the recent minority governments where committees would demand documents from the government and the government would simply stonewall them. Again, of both parties, would simply stonewell and refuse the documents. The difference with the majority is the committees won't even ask for the documents now.

Althea? A few things. I think what's more dangerous is the sort of norm-busting that it creates. Because when I think back to this Harper majority, I don't recall a week that was quite like this when it comes to committees. Absolutely. the majority has shut down investigations and motions they didn't want to deal with. But there was a bit more trading.

You know, there are certain things that the Conservatives want. Like, let's look at the veterans, the impact of the budget on veterans. Why not let the Conservatives have that study? And you say, but then we're not going to support you on this other study. They should be cooperating with each other. And I'm more worried about the standard that it sets because if you're continuously lowling the bar, then the next the government comes in and does exactly. the same thing.

The other thing I think that we should not be blind to, and I think it's worth mentioning to the audience, is Mark Carney is kind of floating the idea of a future cabinet shuffle. And so you have a lot of MPs who want to get to cabinet, who believe that if they just do the government's bidding in the short time, they would be in a better position to get a cabinet post. You know, you have the immigration minister today, a disastrous testimony at committee.

Everybody is wondering why she is still a cabinet minister. It is because the government is floating this idea of a potential cabinet shuffle on the horizon and has been for months in the same way that Justin Trudeau did this too when the backbenchers were trying to organize against him. We're going to take a short break here. But when we come back, we'll look at Mark Carney's sovereign wealth fund and how the fund might, could benefit Canadians. According to the PM, that's next.

a private project that makes money, makes a profit. That's fair, that's good, they're taking risk. But what the sovereign fund can do is that we share in some of that, that we all Canadians are an investor in that. Carney has no surplus and therefore no wealth to put in such a fund. He's talking about a sovereign debt fund. He wants to put another $25 billion. So we're here to break down Canada's sovereign wealth fund,

Chantelle, Andrew, and Althea are all back. Chantel, I'm going to start with you. I mean, when I heard the idea on Monday, I thought, well, this is kind of interesting. I wonder how this would work. And everyone said, well, on Tuesday, you'll find out more about how this will work. And I still don't know how it will work. So it's hard to judge this other than to say the government's going to put $25 billion over three years in it. And I'm not clear where that money is coming from either.

So I have lots of questions, but give me your thoughts. And I have no answers. I've looked at the coverage. We mostly, Andrew is more into economics, but we have a lot of colleagues who are very much into that. So I tried to find some that could explain to me why this was a good thing. And I didn't find many. Why?

Because they didn't have answers. And so I would qualify this as a, missed launch. Why? Because if you're going to do this, you should do it properly. You should provide a rationale, reasons for how it's going to work.

You should do a briefing to explain it, but they can't because they don't know exactly what they're going to do about it. But if you don't know where you're going with this and you want to convince Canadians, maybe you should hold off until you know what actually you're doing. So to try to see benefits to it or to say this is the worst idea on the planet is impossible.

Because you are being given in Le Pitschreins, a French book that everybody reads, the aviator is asked to draw a lamb, a sheep, and he can't. So he draws a box, and he says, the lamb is in there. Well, that's basically what we saw this week. We have a box, and the lamb is in there, and that's the wild fun. So if you like that box, take it home. But I can't tell you what's really in it. Chef's kiss to that analogy.

Andrew. Well, I think the marketers took over from the policymakers. I think they decided sovereign wealth fund sounded like a cool idea. It used to be that every government wanted to have a government-owned airline as a status symbol. Now it's everyone wants to have a sovereign wealth fund, whether in fact you have the wealth in fact to invest. So, you know, we're running definitely. The government has a negative net worth.

This is not a sovereign wealth fund. What is it then? Well, it looks a lot like a lot of other government investment funds that already exist. In fact, the government lists them in the course of proclaiming the virtues of this new one. Well, is it going to do anything different from them? Is it going to do anything different than private investors that it wants to line up with? The government is it pains to say it's going to invest for commercial rates of return, market rates of return. It says it about five times.

Well, in that case, then it's really just duplicating the private investors. So it's either duplicating the existing government funds that try to mess around with the market, or it's duplicating the private funds. The only new thing is that, oh, well, individual investors will be able to invest in this. What is this bringing to the table that the thousands of investment funds that are already available to Canadians to invest in is not? What's new here? What's the problem this is trying to solve? What's the market failure it's trying to correct?

I don't think they know. I think they started off with the cool-sounding idea, and now they're trying to furiously backfill to figure out what the purpose of it is. Well, and the idea that Canadians have an abundant amount of dollars to invest in anything right now is also kind of misses the mark, Althea. I think on the PR aspect, it was more about, you know, hitting the theme of like we're all in this together

and, like, you can invest in Canada. And doesn't it make you feel rosy about the country and your neighbors? That's a good point. I think there's a good point about the lack of information. I mean, the finance minister basically said that they will be borrowing money to cede this fund, but the borrowing of the money is not in this fiscal framework. A lot of stuff is actually not in the fiscal framework. There's no contingency plan for whatever happens with Kuzma.

We have no idea where the defense extra billions of dollars is coming out of this fiscal plan. But anyways, to come back to the soft. sovereign wealth fund. I think because there's not a lot of information, people are starting to fill in the blanks. Like, oh, maybe this is an investment vehicle for all the Emeraldi money and the Canadian pension funds. We're looking at things that they could invest. Maybe this is where the pipeline, the money for the pipeline is going to come from. And so I think Chantanthaler made me, maybe was Andrew who said, you know, they should have had a background briefing. They should have had a background briefing. But I don't know that they have the answers to those questions.

So that's probably why we didn't have it. Okay. So the lamb is inside the box. That's, just believe them. We think it is. Someone's saying us. They're telling us. We think it is. They have, they have not told us. Thank you all. Maybe it's not a lamb at all. Maybe not. All right, I'm going to end this. That is at issue for this week. What do you think about Canada's economic outlook? Are you worried about the size of the deficit? Let us know. You can always send us an email. You can find us at ask at cbc.ca.ca. You can also catch me. on Rosemary Barton Live. That's Sundays at 10 a.m. Eastern. We will be back here in your podcast feeds next week. Thanks for listening. For more CBC podcasts, go to cbc.ca.ca. slash podcasts.