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There was a time in this fair land when a federal budget was an economics document. These days, it is a social policy document aimed to buy votes. It’s actually quite sad.

Let’s call the Canadian federal budget for what it is: a pre-election slate of goodies aimed at regaining the Liberal majority. More than 200 spending initiatives and several brought in during the pandemic are being made permanent, with child care subsidies a major cornerstone.

Spending is now projected to be $165-billion higher in the coming five years than was being assumed in last November’s fiscal statement. Cumulative deficits will add $686-billion to the debt over this time frame, up from the $653-billion forecast made five months ago, which means that from 2020 to 2025 we will have seen Canada’s debt load double.

That is quite an achievement. Like father, like son. Pierre Trudeau took a $20-billion debt level in 1968 to $194-billion by the time the Liberal reign ended in 1984, and from the time Justin took over in 2015, the debt will have ballooned from $634-billion to $1.4-trillion within 10 years’ time (and that, of course, assumes no recession over this time frame, or any interest rate risk).

This was a document that elbows out the NDP and positions the government as the left-leaning party that can actually get elected. It is a massive multiyear spending binge and there is no doubt that a lot of Canadians will be better off, but it is doubtful that the country can really afford all this future large-scale expenditure. Future generations will bear the tax burden because there isn’t enough demand for 50-year Government of Canada bonds to finance this entire spending boom.

The initial market reaction from the bond and currency markets has been muted, to put it charitably.

For all the talk of fighting the pandemic, 60 per cent of the $143-billion of new spending is earmarked for the five years after the 2022 fiscal year. Not just that, but when you look line by line, more than 90 per cent of the new spending has nothing to do with fighting COVID-19.

What was a 30-per-cent federal debt-to-GDP ratio when the Liberals took over in 2015 is now 50 per cent as part of this “new normal,” which can only be afforded via microscopic interest rates. And let’s not forget that when we include the provinces, Canada’s all-government debt ratio has already soared to unprecedented heights of around 110 per cent – up 35 percentage points in the past decade.

If the government really wants to protect Canadians, it would unveil policies to help create a homegrown pharmaceutical industry. Instead, we are left with a $10-billion biotech trade deficit, which has ballooned 30 per cent in the past decade.

And how are we protected from disrupted global supply chains and a world that is onshoring production of goods that are integral to national security – such as semi-conductors? Canada runs a chronic huge trade deficit in electrical and electronic components of $40-billion annually that has also widened a massive 40 per cent in the past decade. Or food supply? Canada has been running trade deficits on food products now for 13 consecutive years. Haven’t we learned anything from this pandemic beyond providing the Canada Emergency Response Benefit and the like?

The budget was replete with a social spending boom of historic proportions but nothing in here to deal with long-standing structural impediments to economic growth – the growth we will need to help absorb these incredibly large public expenditures now and in the future.

The focus is what was in the budget – all 739 pages – but it was what was not included that also spoke volumes. Nothing on the supply side to promote growth, which is remarkable since the pandemic’s hit to the economy hit supply as much as demand. Indeed, it’s as if the supply side of the economy has no room in Ottawa’s strategy. Yet, how can you expand the economy without nurturing productivity growth? Robust immigration is one way, but that doesn’t raise real GDP per capita, which is among the best measures of economic progress. The Liberals will tell you that these are investments in human capital, but in the end, it is multifactor productivity that matters most in this regard – the interplay between the work force and physical capital.

We haven’t seen growth in this metric in this country in a decade and that is because we have not addressed the stagnation in the manufacturing capital stock over the same period. This is why Canada has been running sizable current account deficits each and every year since 2009 – a sign of sagging productivity and continuing loss of competitiveness, part of this related to taxation policy.

If there is a legacy to the current government, it is that foreign direct inflows have contracted 40 per cent since the ruling Liberals grabbed the baton from the Conservatives back in 2015. So no measures in the budget to promote productivity. No measures to attract foreign investment. No measures to promote the growth in the depleted private sector capital stock. No measures to revive the supply-side of the economy to help pay for this incredible spending experiment.

The belief that somehow decades of low interest rates will coexist with aggressive economic growth and finance all this largesse is fanciful. The sad part of this is that taxes at some point will have to rise (and likely quite sharply) to pay for all of the social program spending the government is locking us into, but these likely will await the outcome of the next election.

For now, just issue more bonds and continue to extend the bond maturity profile. Save the tax file for later.

David Rosenberg is founder of Rosenberg Research, and author of the daily economic report, Breakfast with Dave.

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