Message received.
If there’s been one persistent, overarching and valid criticism of Prime Minister Mark Carney over his mostly charmed 20 months in office, it’s been that his version of defending Canada’s economic sovereignty has been too narrowly focused. If you’re not on Bay Street, a proponent of a major resource project or looking to build the defence industry, he hasn’t seemed all that interested.
The budget delivered on Thursday seems, among other things, to be a response to that concern.
It’s a document that shows some heart, some broader recognition that economic growth needn’t only be achieved by moving around the largest possible sums of money, and some prioritization of things heretofore treated as fuzzy relics of the Justin Trudeau era. And it will make for a fascinating, high-stakes test of whether Carney’s results-oriented, investment-banker sensibilities prove as effective when applied more widely.
The most striking and frankly surprising expansion of his focus is his attempt to tackle homelessness with an $11-billion commitment over the next four years (and more thereafter), largely for transitional and supportive housing, combined with health and social supports. Even if it’s extremely unlikely to end the crisis altogether within a decade, as the budget claims, it’s a more concerted effort than we’ve seen from Ottawa in memory. And it’s atop a further investment in non-market housing, an expansion of the government’s groceries and essentials benefit for low-income people, and other affordability measures.
But there are plenty of other, only slightly subtler examples.
There were questions about whether all of Carney’s emphasis on making us less reliant on the United States economically would be matched by asserting our cultural independence. So the budget includes billions of new dollars for everything from community centres to the CBC to (most imaginatively) a promised tax credit on artists’ earnings up to $45,000.
He’s been accused of almost completely abandoning Trudeau-era efforts to fight climate change, through deregulation and a push to export more oil and gas. Now, he’s at least upping the effort to shift domestic consumption away from polluting fossil fuels, primarily through spending $50 billion on expanding the electricity grid into the 2040s, atop money (like new heat-pump subsidies) to get us to electrify our day-to-day lives.
There were complaints that his major-projects push and accompanying courtship of foreign capital wasn’t matched by a strategy to grow Canadian businesses. Those were answered with tax breaks — to exempt capital gains earned from investing in early-stage companies, with further incentives for reinvesting in other domestic startups — which advocates for the innovation ecosystem had been seeking. And there’s a nod toward addressing small businesses’ challenges in accessing capital through our big commercial banks, in the budget’s promise to develop policy that will help expand networks of credit unions, community banks and other lending alternatives.
None of this is going to totally stave off all worries about this prime minister’s long-term priorities, or his corporate-Canada coziness.
There are still pressures, on our economy and our social fabric, that his government has yet to address. That certainly includes health-care costs that will put unsustainable pressure on the provinces amid an aging population, about which the budget is silent. You could point, too, to the struggles of universities and colleges (particularly after Ottawa abruptly cut off much of their foreign-student revenue), and how they fit into our efforts to prepare younger generations for an extremely uncertain future.
And by far the biggest new line item is the “productivity mega deduction” — a massive tax break forecast to cost $36-billion over five years, largely for capital expenditures in the resource sector, which Carney announced in September. We don’t yet know how effective it’ll prove in boosting investment, but if you’re worried that the projected $62-billion deficit would be dangerously high if not for inflated oil revenues, and could yet become so if growth projections prove too optimistic, you might want to start there and with the broad income-tax cut he introduced upon taking office.
Still, this is a government that’s started to address what seemed to be some of its biggest blind spots, which is worth appreciating.
Now comes the challenging, ultimately telling part.
So far, Carney has earned admiration for an impatient advancement of his priorities that’s struck a contrast to Trudeau and to other PMs before him. He’s bent Ottawa to his will.
But he’s done so in service of a set of goals mostly narrow enough that he and his very small inner circle — consisting of a handful of advisers, a small minority of cabinet ministers, a few heads of agencies he’s created, and the tiniest sliver of a public service mostly deemed not up to the job — have been able to steer them.
It’ll help that much of what he’s trying to do now will continue to be through tax measures, which are relatively easy to implement. But even those have a history of clunkily making their way through the bureaucracy.
And something like the homelessness strategy — to be administered primarily by Build Canada Homes, a new agency still finding its footing, while requiring work with other levels of government — will be harder.
If he’s able to successfully apply his businesslike sensibilities to those sorts of social challenges, and to values-driven aims that his predecessor championed but sometimes struggled to deliver on, it could go some distance toward renewing Canadians’ faith in government. If it doesn’t translate at all, the opposite could happen.
It was responsive for Carney to scale up his ambitions. We’ll soon find out if his management style can scale, too.
