June 27, 2022

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Federal budget 2022: Chrystia Freeland finally gets serious

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Kevin Carmichael: The 2022 budget has a maturity that Team Trudeau’s previous financial plans have lacked

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Paul Martin needed two budgets to become Paul Martin.

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The late Jim Flaherty’s fiscal update in November 2008 nearly triggered a constitutional crisis, before he got serious about the Great Recession and tabled a budget in January 2009 that earned him a place in Canada’s pantheon of economic stewards.

If there is a group in Canada more averse to risk than the business elite, it’s the political class, which proves over and over again that it’s incapable of making a difference before first making things worse. Martin, facing a debt crisis after Jean Chrétien made him finance minister in 1993, balked at making the truly hard decisions in his first budget. Flaherty, a foot soldier in former Ontario premier Mike Harris’s “Common Sense Revolution” in the 1990s, needed time to get over his ideological aversion to deficits.

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So, too, Chrystia Freeland, who, along with her boss, Prime Minister Justin Trudeau, appears to have needed a bloody war in Europe to appreciate the seriousness of the crisis at her door.

The delay is frustrating, but not unusual. Martin needed a dressing down by Canada’s creditors to appreciate that the mismatch between spending and revenue had grown too wide to be fixed by promises and half-measures. A decade-and-a-half later, Flaherty rediscovered the hard way that austerity doesn’t spur economic growth when all the private money has fled out of fear of a depression. The 2022 budget, arguably the closest the Trudeau Liberals have come…

Kevin Carmichael

2022-04-08 10:21:13

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