He’s tweeted. He’s Facebooked. And Google Hungout. He YouTubed it all, and even held a bunch of Town Hall meetings, like yesterday’s in the Ottawa inner-city hood of Vanier. Bill Morneau, the Bay Street millionaire tapped to be the new federal finance minister, has been cutting a wide swath through social media to try and connect with the demographic his government cares most about: the moisters.
As you may know, the T2 Lib gang were successful in tapping into a new pool of voters, the Millennials. About two million of them, actually. Smart politics. After all, the kids now outnumber the wrinklies, as the 18-to-30 generation becomes the dominant population group, surpassing the Boomers who still have better music and deeper sex appeal. And no Adele.
The impact on federal finances is consequential. We’ll all see that on Tuesday, March 22nd at 4 pm when Morneau stands up in the House of Commons, drinks eight glasses of water and delivers his maiden budget. The applause from the benches behind him will be thunderous because, well, it’s 2016.
What does this mean? Simply, the utter repudiation of the Harpercon philosophy which ruled the past eight years and propelled Canada through the worst financial crisis since the 1930s. This new budget is aimed at a new batch of people – those who (a) have never known interest rates higher than three or four percent, (b) who believe society has cleaved into The Rich and The Rest, (c) who put social justice and equality before fiscal responsibility, (d) who like taxes (because other people pay them) and spendy governments, (e) who are totally house-horny, and (f) are way too educated, under-employed and over-entitled. In short, they love deficits. Which is a damn good thing. Lots are coming.
So the days of austerity, GST cuts and balanced budgets are gone, along with support for the resource sector, paunchy plaid shirts and climate change denial. You’ll see this in spades in the Morneau budget of 2016, ushering in a string of deficits reaching as high as $80 billion by the time the first T2 mandate comes to an end.
Dead are the Liberal election promises of running a $10 billion annual shortfall for a couple of years, in order to stimulate the economy. Since last fall Canada has lost significant altitude – oil and the dollar down, unemployment and household debt up. So the deficits will be thrice that amount. Also dead is the notion of a balanced budget by 2020. We may never see once again, and certainly not in four years.
So now we know. Morneau said Monday the red ink will be more than $18 billion, even without adding in new spending on infrastructure – anther $10 billion. Just like that, a $30 billion hole. At least we now have a new government consistent with the debt-pickled people who elected it.
But moisters are okay with deficits because people get instant gratification (bigger public spending and largesse), more powerful and activist government (the kids are lefties, after all) and yet the bill is kicked down the road, probably to be paid by rich people. What’s not to like?
On that theme, the Morneau budget will extend the war on the successful. First a new eat-the-rich tax bracket was created to finance a middle-class tax cut (but it doesn’t, since we don’t have enough wealthy people) and next month professional corporations will be targeted. Income-sharing with family members will be in the crosshairs, along with (I hear) tax avoidance through dividends distribution and holdco-opco structures, plus family trusts. Call this the whack-your-doctor tax.
If you doubt it, listen to his words when he said the 1%ers have benefited more than the middle class for the past forty years: “Income inequality is an even bigger challenge in times of economic stress, especially for blue collar workers who tend to be the first to feel the effects of economic downturns.” The fact that Canadians has pushed home ownership levels past 70%, goosed personal debt to 171% of disposable income and shoved real estate values to among the highest in the world even as the economy sags, will be ignored.
Blaming the rich is like blaming the Chinese. It’s politically cheap. It’s demonstrably wrong. But it works.
Consider the official release from the Department of Finance, where the ‘new course’ (big deficits) looks a lot like the old one (big deficits):
With its first budget, the Government of Canada will chart a new course, and signal its intention to adopt a different approach to economic and fiscal policy. At the heart of this approach is a commitment to strengthen the middle class and create conditions for economic growth that benefit all Canadians.
By strengthening the middle class and growing the economy, Canadians who work hard can look forward to a good standard of living, a secure retirement, and better prospects for their children. It also helps to ensure that the government has the resources it needs to lift the vulnerable out of poverty, invest in research and innovation, and provide economic security to all Canadians.
The new government will take action to ensure that economic growth is shared equally with the middle class and those working so hard to join it. In challenging economic times, the government has an important role to play. Now—more than ever—is the time to make investments to build a stronger middle class and foster sustainable, clean growth.
Note the part about the government ensuring “growth is shared equally with the middle class.” Tom Mulcair must be so proud. Rich people are in for a big Hoovering.