It's Just An Economy

People serious about fixing the eye-watering broken state of the economy don't hold off on an abridged budget until later on this fall.

But here we are:

This year’s federal deficit is likely more than $80 billion, Opposition Leader Pierre Poilievre said yesterday. Cabinet’s original forecast of $42.2 billion appeared unrealistic following excess spending, he said: “It’s all a show.”

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Cosmetic cuts only.

Carney can't afford to lose the public sector and their precious votes:

Cabinet will make “adjustments” to the 440,000-employee federal payroll this fall, Finance Minister François-Philippe Champagne said yesterday. He would not discuss the scope of any layoffs: “There are tough choices ahead.”

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The U.S. president did say when Carney removed most Canadian counter-tariffs on U.S. imports last month — a sensible move because they were raising the cost of living for Canadians — that, “We want to be very good to Canada. I like Carney a lot. I think he is a good man and we had a very good talk yesterday. He is removing tariffs which I thought was nice and we’re going to have another call soon.”

However, the major damage to our economy remains Trump’s 50% sectoral tariffs on Canadian exports to the U.S. such as steel and aluminum and on that issue, Carney said Wednesday, “Don’t expect immediate white smoke on one of these strategic sectors, but that’s the type of conversation that we’re having, and we’ll continue to have as well.”

All of this is a far cry from Carney’s original “elbows up” rhetoric that Canada would respond with “dollar-for-dollar” tariffs against the U.S. with the goal of having all of Trump’s tariffs removed.

He had actually backed off that position by the time he became prime minister, saying it was unrealistic because the U.S. economy is 10 times the size of our own, and in mid-July conceded it was unlikely a deal would remove all of Trump’s tariffs.

After Canadian “deadlines” to reach a deal with the U.S. first by July 21 and then by August 1 failed to materialize, Carney’s position became that “no deal is better than a bad deal” leading up to his latest argument that Canada has already achieved “the best trade deal of any country in the world” with Trump.

Since we don’t know the substance of the ongoing Canada-U.S. negotiations it’s impossible to evaluate at this point whether Carney’s strategy of moving away from his original “elbows up” rhetoric to a far more conciliatory approach — including passing the Strong Borders Act, killing the digital services tax and dropping retaliatory tariffs in deference to Trump — will work.

We do know that Carney keeps moving the goal posts on what a good deal means.