Mark Carney is committing enormous sums of public money with little explanation, in ways that neither Justin Trudeau nor most other prime ministers before him could have gotten away with.
It can be easy to look past, because of the financial gravitas that Carney carries.
Easy, too, because his spending spree this summer has mostly involved priorities — fossil-fuel infrastructure, defence — that don’t tend to invite noisy criticism from fiscally conservative chattering classes in the same way as social investments. And it’s broadly been in line with a national appetite for spending to bolster economic sovereignty and national unity, and to decrease reliance on the United States.
But there’s too much at stake, in the bets he’s placing on the country’s future, for the just-trust-me style in which he’s rolled out recent announcements.
If you’re looking for warning signs along those lines, there could scarcely be a better example than what we’ve thus far learned — and not learned — about plans around a new west-coast oil pipeline.
It requires some chutzpah to abruptly pivot from backing a project of this scale if it’s privately funded to partnering with the government of Alberta to pay for almost the whole thing, without forthrightly explaining why the calculus has changed.
It takes even more to provide no federal estimates for what this will cost (seemingly about $20 billion for each government, based on what Alberta had to say), nor a serious explanation for the business case.
Read the announcement, and you’ll find some almost comically inflated economic benefits claims, like “up to 140,000 jobs” being created during construction and operation. What you won’t find is, say, what gives Carney confidence that there will be enough new oil-sands production to fill the pipeline’s capacity of one million barrels daily.
Nor will you find any detail whatsoever, in the announcement or since, about a passingly mentioned agreement between the two governments and the oil-sands giants to advance the Pathways series of carbon-capture investments that Carney has maintained is a pipeline prerequisite. So we’re left to wonder, for now, whether (atop capital subsidies for Pathways to which Ottawa has already committed) taxpayers are taking on roughly $15 billion in revenue risks that the companies have to this point signaled they want no part of.
Then there’s the roughly $20 billion in spending commitments to B.C. (an estimate that again came more from the province than the feds) to get Premier David Eby to go along with the new pipeline through his province’s south.
Some of those promises, notably $10 billion for upgrades to the Roberts Bank port that vastly exceeds previous estimates of what’s needed there, are at least somewhat tied to the pipeline plan. Others, like $3.5 billion for a northern power-transmission line or $500 million toward a copper mine or $630 million for child care, bear no direct relation. None had the detail that might have been expected, had they not all been lumped together concurrent with the pipeline announcement with Danielle Smith.
It was almost as though the aim was to reach as high a dollar figure as possible in a single day, which wouldn’t be entirely out of keeping with how Carney is approaching other targets as well.
We’ve belatedly reached a near-unanimous national consensus to spend more on our military after decades of neglect. But normally, that would start from a position of need, with an aim to address shortcomings — in personnel and pay, facilities, equipment — as efficiently as possible.
Instead, in the interest of meeting NATO targets (3.5 or 5 per cent of GDP by 2035, depending how you slice it) that other countries are embracing with varying degree of seriousness, the government seems to be starting from a desired spending total and working backwards.
That approach contributes to questions like whether we’re going to wind up with more submarines than we need as warfare is increasingly conducted through new technologies.
It also might lead us back to an instructive comparison with Carney’s predecessor.
Imagine that Trudeau had announced he was going to spend an extra $50 billion per year to fight climate change — he couldn’t say exactly how, or on what, but it was international obligation. Then each new expenditure was touted as getting dollars out the door as quickly as possible to achieve it.
If he would’ve been laughed out of Ottawa, as seems likely, then maybe we should reserve at least a hint of that skepticism for Carney now.
Canada isn’t facing a government debt crisis the same way some other western countries are. And there’s something to be said for Carney’s attempt to focus new spending mostly on capital investments that could eventually pay back, rather than operational ones.
But not all investments, even if they’re toward long-term goals that most Canadians agree upon, are of equal value.
And every billion dollars that’s committed today could constrain Ottawa’s ability to spend tomorrow — whether it’s to address social needs of an aging population, steer our workforce through the rise of AI and other technological shifts, compete in emerging industries, or build other infrastructure.
The capacity isn’t limitless, and the benefit of the doubt shouldn’t be either. The more that Carney locks us into choices, the more we should demand better from him in justifying that they’re the right ones.
