00:00Jobs Minister Patti Haidu there announcing a $400 million relief loan for tariff hit Algoma Steel.
00:06The Ontario government adding another $100 million for the Sault Ste. Marie Company.
00:10The demand from sectors hit by Trump's tariffs is one of the reasons the Feds say their November budget will have a, quote, substantial deficit.
00:17Conservative leader Pierre Polyev is not buying what they're selling. Take a listen.
00:21Recently, Mr. Carney appointed a parliamentary budget officer.
00:25And that budget officer is commenting on Carney's spending and his deficits and said they are, quote, very alarming, stupefying, shocking, unsustainable.
00:35If you don't change, this is done.
00:37The five-year horizon for deficits has now doubled under Carney versus what it was under Trudeau.
00:44So a more conservative-looking haircut, suit and resume has not resulted in more conservative spending.
00:51Let's bring in the front bench to talk about that.
00:56With me tonight, former New Brunswick Liberal Premier Brian Gallant.
00:59He's the CEO now of Space Canada.
01:01Former Conservative Deputy Leader Lisa Wright is with us.
01:04She's the Vice Chair and Managing Director of Global Investment Banking at CIBC.
01:08CTV News Political Analyst and former NDP Leader Tom Mulcair is with us, as is the Toronto Star's Queens Park Bureau Chief Rob Benzie.
01:14Hi, everybody. Happy Monday. Good to see you.
01:16Hi, Vashie.
01:17Brian, I'll start with you.
01:19I found it interesting today that in particular behind the scenes, the government was really conveying, hey, this loan we announced today is an example of why the deficit will be a larger number than we originally thought.
01:30They're trying, I think, attempting to lay some groundwork to try and put forward a case for that.
01:36The leader of the opposition in Pierre Polyev was asked about things like that and came back with, you know, condemnation, basically, whatever the reason is for a bigger deficit.
01:46And as you heard him say, like, you know, you're not really a conservative prime minister, even though you've been characterized as such.
01:51What do you think of the way that those arguments are bearing out?
01:56Yeah. So, I mean, no surprise that the government is going to lay the groundwork for whatever is going to be in the budget.
02:01In this case, it looks like some of the things they're worried about or that they want to flag with Canadians before they actually introduce the budget is indeed the deficit.
02:09And they are, as you mentioned, trying to link it to things that they hope people would support and saying these are some of the reasons why we may have a larger deficit than we would like.
02:18And in terms of Polyev's tack, I think it's the right approach, obviously, from his point of view to say, to try to lay his groundwork and say that this is going to be a real problem, whatever the deficit is.
02:28Right. He's obviously going to try to say that this is all mismanagement on Carney's front.
02:33Carney and co. will probably, I would think, argue, look, we just got here, give us some time.
02:39We're acting boldly on major projects, trying to get revenue in, trying to get the economy going.
02:45We're going to be asking departments to come with proposals to cut as high as up to 15 percent of expenditures, which one can certainly argue you can't necessarily do that in budget one, but you get those ideas.
02:58And over time, you can, with a few budgets, try to get to that number or close to that number for some departments.
03:04So I think there's going to be a bit of a game of trying to explain and lay the groundwork before the budget.
03:09Ultimately, when people see the budget, the deficit is definitely going to be the thing that we probably all chat about, especially given Carney kind of came in with this idea that he would be fiscally more focused than the Trudeau.
03:23So a lot of groundwork delay.
03:26The poop will be in the pudding.
03:28Sorry about that.
03:29You cut out for a moment, Tom.
03:30I'll swing over, just jump off that point and ask you, because we've talked on a number of occasions on this panel specifically about, like, the politics of deficits, right?
03:37Like, how much do people care?
03:38You obviously have, you know, very intimate experience with that.
03:41The context has definitely changed over the last 10 years.
03:44Is the argument around mismanagement easier to land with someone like Justin Trudeau than Mark Carney?
03:51Or is there a potential vulnerability for the Carney government because of what Brian just laid out, that Mark Carney did position himself so clearly during the election as, you know, a manager, a competent manager of the economy?
04:01No question that that was a main selling point for Mr. Carney during the campaign.
04:07But I think that Canadians still hang their hats on that.
04:10Canadians are still looking at him as the person who can stand up to Trump, deal with the budgetary situation.
04:15And they know that there was already a massive deficit projected in the $60 billion range.
04:20So it might grow to $70 or $90 billion.
04:23They know that that's a possibility.
04:25And they also know that even though it is a bit self-serving to say, oh, Algoma Steel, here's a check for a half a billion dollars from Ontario and the feds.
04:33And that's why we're running up this deficit.
04:35People see through that.
04:36But they also know that it's necessary.
04:38Because if you don't have these big industries and if they all fail because of the short-term effect of these Trump tariffs, then Canada is the loser long-term.
04:46I think that's the big difference.
04:47When you're in opposition, you fire at this stuff.
04:50I've always believed, and I understood your reference to be about that.
04:53I've always believed that governments should not take in more than what they need and shouldn't spend more than what's necessary for the programs that are essential for people.
05:00But that last part has changed radically.
05:03So we're not only talking about the government programs that we've known about in the past, but the government has to step up to the plate now and help companies like Algoma Steel.
05:11Otherwise, again, long-term, we'll be losers.
05:13So we've got to get past the Trump phase.
05:16It is temporary.
05:17It'll be a couple of years.
05:18He's already going to be a lame duck in a year.
05:20So that'll all change rapidly.
05:22But for now, we're very vulnerable, and Canadians understand that.
05:26I imagine, Lisa, that the government, like Brian and Tom both pointed out, will tie the deficit to things like the announcement today or other supports necessary because, in their view, of what's happening with Donald Trump.
05:38Does that, do you think, inform or change the conservative rebuttal at all?
05:44Or do you imagine that it stays very much like deficit bad no matter what?
05:48Well, I think that what the conservatives will attempt to do, and I hope they do, is try to give a little context around it.
05:55And the very beginning, in 2015, the Liberals said, we're going into a deficit because now is the time to invest.
06:01Money is cheap, and we can do this.
06:03And then we went into deficit because it was COVID, and they have your back, and Canada has to make sure they come out of the pandemic.
06:09And now we're faced with yet another crisis, absolutely, but now we have to spend even more.
06:14And the key for the conservatives is to try to get Canadians to think about deficits in the light of, you feel the pain right now in the economy?
06:23It's because they've run deficits for the past 10 years.
06:26You can argue with me about whether or not that's a true fact, but that is the connectivity between what the conservatives are saying right now with respect to spending and deficits and what they want Canadians to remember.
06:36That a big deficit is actually going to be problematic for them in the short, medium, and long term.
06:41But I will say, lastly, I'm in the Port of Montreal today talking to shippers about how the economy is and what the impact of the U.S. tariffs are.
06:49And it is absolutely factual that there are problems in the steel industry, that there's problems in the aluminum industry.
06:56Shipping is down 50 percent, 60 percent in some cases.
06:59This is a very real crisis.
07:01It's unfortunate, though, that the liberals have spent the last 10 years talking about deficits as being something that they're allowed to do and there's no impact.
07:08And now they really have to do it and they have to argue with conservatives that there's not going to be an impact again.
07:16In a way, though, Benzie, both parties have a similar task, like boiling down their argument to how it will impact people.
07:25In the case of the liberals, if they want to justify a deficit, they have to explain, like, here are the reasons why this actually will help you and help the country or mostly you in this crisis.
07:36If the conservatives, as I understand Lisa's point, want to punch through on the deficit, it's going to have to be like, here is what that big number actually means for your life in the future.
07:44And it's tough, Vashie. I mean, here in Ontario, the progressive conservative government runs, has been running big deficits its whole seven, eight years in office.
07:54And voters haven't punished them for that because they're seeing investments in things that they want.
07:59And I think this is the challenge. Now, Lisa's not wrong.
08:03Mark Carney was an electoral unicorn who promised everyone a pony for Christmas.
08:07Well, Christmas is coming and we're all looking for Santa.
08:11So the budget is going to have to make some difficult choices.
08:15And I think it's going to be interesting to see what those choices look like.
08:19If the deficits are as big as the parliamentary budget officer is guesstimating, then that's a problem, I guess, for the guy who is the fiscal manager.
08:29But I don't know if people if people don't want program cuts.
08:34That's a tough problem for Mr. Polyev.
08:36He can say government needs to be leaner and meaner.
08:38And then you say, OK, well, what would we what would you cut?
08:41Where are the choices you're going to make?
08:42They always say, oh, we're going to find efficiencies.
08:44We're going to cut consultants.
08:45It's never the major things that Canadians notice.
08:48They're not saying we're going to do what John Gretchen did in the 1990s.
08:51We're going to cut transfers for health care to the provinces.
08:54And that's going to lead to cuts of the provincial government.
08:57Tories won't do that federally.
08:58Neither will the liberals.
08:59So I'm not sure anyone really wants to make the difficult decisions.
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