Is Trudeau to blame for Carney's disappointing budget?

Interactive Transcript

spk_0 Welcome to Hub Headlines.

spk_0 Today's program features the weekly rap by the hub's editor at large, Sean Spear,

spk_0 who analyzes the big story shaping politics, policy, and the economy in the week that was.

spk_0 Today he discusses how, once again, the Carney government is stuck with Trudeau's bill.

spk_0 How Trudeau's immigration policies were unsustainable.

spk_0 And whether Carney can find an alternative, and why conservatives should lament the course of Canada's courts,

spk_0 and do something about it.

spk_0 A big yet under-discussed part of the Carney government's budget is its comprehensive expenditure review,

spk_0 which is projected to achieve $13 billion in annualized savings by 2029 to 2030.

spk_0 The largest single source of savings is adjustments to the indexing of the pensions for retired public servants.

spk_0 It's projected to net $5.8 billion over four years, or an average of about $1.45 billion per year.

spk_0 These fiscal savings only offset a small fraction of the government's increased spending,

spk_0 and therefore will have minimal effect on deficits or debt in the coming years.

spk_0 The whole exercise reinforces the costs of the Trudeau government's regrettable decision

spk_0 to reverse the Harper government's plan to raise the old age security eligibility age from 65 to 67.

spk_0 The real budgetary consequences are arriving now, and will compound through the decade.

spk_0 Readers will recall that the 2012 reform would have phased in gradually, starting April 1, 2023,

spk_0 and reached their full effect by January 2029.

spk_0 The office of the superintendent of financial institutions later estimated that these changes would have saved just over $11 billion annually as of 2030.

spk_0 Given the phase in period, it's reasonable to assume that it would have generated roughly $5 to $6 billion this year.

spk_0 That would represent nearly half of the Carney government's own savings target and exceed its largest savings measure by far.

spk_0 One cannot help but think that Prime Minister Carney wishes that he could claim those savings now in light of the fiscal pressures that his government is facing.

spk_0 The uncomfortable truth is that the Trudeau government's short-term political calculus a decade ago has become a long-term structural problem for today's policy makers.

spk_0 Ottawa now finds itself scouring departmental budgets for efficiency savings, while a single policy reversal continues to add billions

spk_0 in permanent and compounding costs every year.

spk_0 The budget reinforces a deeper lesson about fiscal policy.

spk_0 Prudence delayed is prudence denied.

spk_0 It's far easier to score political points by undoing tough policy decisions than it is to make them.

spk_0 The Harper government tried to get ahead of an aging population.

spk_0 The Trudeau government reversed it, and now the Carney government is stuck with the bill.

spk_0 One of the underappreciated developments in the Carney government's first budget is the recalibration of Canada's immigration targets.

spk_0 Although there have been criticisms, some have observed, for instance, that actual immigration numbers will likely exceed the headline targets.

spk_0 The broader direction remains clear.

spk_0 The new targets bring immigration levels broadly closer to those of the Harper years than the Trudeau years.

spk_0 That's a significant economic development.

spk_0 Immigration has been the main driver of Canada's headline GDP growth over the past several years, which, as we've documented at the hub, has masked the deeper problem of stagnant productivity and declining output per person.

spk_0 Had immigration levels remained closer to their historic norm, it's quite possible that the Canadian economy would have been in or near recession.

spk_0 The Trudeau government's immigration policy was, in effect, an exercise in demand management.

spk_0 By flooding the economy with new consumers, workers, and renters, it could generate headline growth even as productivity faltered and investment stagnated.

spk_0 The costs on housing, infrastructure, and social cohesion were left for future governments to absorb.

spk_0 The Carney government has chosen a different path.

spk_0 Its decision to unwind some of the excesses of Trudeau era immigration represents an implicit rejection of the idea that growth can be imported rather than earned.

spk_0 It will, however, make the underlying challenge of low productivity even more acute.

spk_0 With fewer new arrivals propping up headline numbers, Canada will need to find growth from other sources.

spk_0 The key takeaway is that one way to read this budget is as a repudiation of the Trudeau government's immigration-driven growth model, precisely because it was reckless and unsustainable.

spk_0 But that doesn't mean the Carney government has yet found a credible alternative.

spk_0 A temporary fiscal cushion is not a productivity plan, and lower immigration alone won't fix the economy's structural weaknesses.

spk_0 After too long of relying on population growth to paper over stagnation, Ottawa must finally confront economic reality.

spk_0 The recent decision by the Supreme Court of Canada, in Attorney General of Quebec 5 Sen. has rightly received criticism from conservative commentators.

spk_0 In particular, I'd encourage readers to check out Howard Anglin's thoughtful analysis for the hub.

spk_0 At its heart, the court struck down a one-year mandatory minimum for possession or accessing child sexual abuse material on the basis that a uniform penalty could hypothetically capture young adults in consensual relationships.

spk_0 As much as the decision has provoked conservatives, it's important to note that it wasn't unanimous.

spk_0 Four justices, Chief Justice Richard Wagner and Justices Suzanne Cote, Michelle Obonsoin and Malcolm Rowe, dissented.

spk_0 The crux of their dissent was that the mandatory minimum served the legitimate objectives of denunciation, deterrence, and community condemnation of child sexual abuse material, and that the hypothetical scenario put forward by the majority was to remote to trigger gross disproportionality.

spk_0 As the dissenters wrote, the constitutional standard of a grossly disproportionate sentence is a demanding standard that requires the exercise of normative judgment.

spk_0 A sentence that is merely excessive does not cross the constitutional line. It must be so excessive as to be incompatible with human dignity.

spk_0 When a court engages in normative reasoning to determine whether a sentence for child pornography is so long that it becomes grossly disproportionate, the court must necessarily bear in mind the profound wrongfulness and harmfulness of these crimes.

spk_0 These heinous offenses call for strong condemnation. The court owes greater deference to Parliament's decision to enact the mandatory minimum.

spk_0 From a conservative perspective, this case underscores two imperatives. First, cultivating a network of law students, lawyers, and legal scholars who reject left-wing judicial policymaking.

spk_0 Second, winning elections and appointing such jurists to the bench.

spk_0 To that second point, one of the regrettable outcomes of April's election, particularly if the Carney government lasts a full term, is that it will enable the Prime Minister to appoint Justice Rose successor when he retires sometime between now and 2028.

spk_0 Losing Roe will be a serious loss for common sense, and for the country.

spk_0 Although appointed by Prime Minister Trudeau, he has distinguished himself for his pragmatism and thoughtful restraint, reflected not only in this dissent but also in his 2024 keynote address to the Runnymead Society, where he urged judges to respect institutional boundaries and resist the temptation to legislate.

spk_0 His voice, including in this case, is valuable precisely because of his pension for prudence.

spk_0 Conservatives rightly lament the direction of Canada's courts. The Senate will decision offers another reason to do so. Yet in Rose dissent, we're reminded that judicial restraint and democratic humility still have a small number of defenders.

spk_0 There's an onus on the critics of judicial activism to add to their numbers.

spk_0 That's it for today's edition of Hub Headlines. We hope you enjoyed the program. Hub Headlines is produced by Alicia Rao.

spk_0 This program was narrated by automated voices. Thanks for listening.

Is Trudeau to blame for Carney's disappointing budget?

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