A mix of realism and optimism, with an explanation of how deficit spending hurts regular Canadians by making everything more expensive.
In a recent article, Aaron Wherry of CBC declares “The balanced budget era is over. Now what?”
Wherry also points out, “No party is going into the next election with a promise to eliminate the deficit.”
Why mention this?
Because, as the State Broadcaster, CBC telegraphs the message that Trudeau and the government pushes, and declaring an end to balanced budgets is that message.
That said, Wherry isn’t wrong in his assessment of what the main parties are proposing.
While Justin Trudeau and Jagmeet Singh have of course abandoned balanced budgets, even the CPC under Erin O’Toole has moved to a more left-wing position, with O’Toole saying the CPC won’t balance the budget for another 10 years.
Any promise to do something over 10 years is close to meaningless, since that would assume you are getting re-elected over and over again, which can never be guaranteed.
As a result, there is a consensus among Trudeau, O’Toole, and Singh on not balancing the budget, which is a disturbing occurrence for Canadians who value fiscal responsibility.
The inflation tax
It’s important to note how things have changed in Canada, and why getting to a balanced budget is so important.
Until the COVID pandemic, talk of ‘running deficits’ was about deficits in the range of $10-$20 billion. As a percentage of the economy, those aren’t huge, and don’t have a huge distorting impact on the economy.
But, the Liberals have – after running gigantic deficits for a year due to understandable circumstances – sought to entrench a much higher level of spending.
We are talking deficits above $150 billion, with the Liberals bringing in roughly $100 billion in permanent new spending.
They are taking the ‘opportunity’ to reset spending levels at a much higher rate.
This has been financed by historic levels of money creation by the Bank of Canada, with interest rates being artificially kept low to enable a huge expansion of government.
It is of course no surprise then that inflation has gone up dramatically, with already-struggling Canadians facing a higher and higher cost of living.
The government loves that, since they get credit on the one hand for all the ‘new support’ for people, while the actual value of that support erodes due to the declining value of money.
Inflation is the hidden tax that governments use to get away with robbing the people, and they enjoy it since it makes it hard for many people to see the robbery as it happens.
Poilievre a rare politician who talks about this in detail
Many politicians – most of them – don’t talk much about inflation, especially lately.
The Liberals and NDP clearly want to use inflation to get away with a huge expansion of the state, and the CPC seems unsure about their message, going back and forth between criticizing the Liberals for higher deficits while also promising not to cut anything.
You obviously can’t have it both ways.
If the $100 billion in permanent new spending is ‘too much,’ that means you have to cut.
If it’s not a problem, then why criticize the Liberals for it?
This incoherent message is a key reason why the CPC is struggling. Many Conservatives feel they don’t have a consistent message to promote, and opponents can simply read the worst into what the CPC claims.
One of the few CPC politicians to push back against this is Pierre Poilievre.
The former CPC Finance Critic as long been talking about the danger of overspending, and has been explaining the link between large budget deficits and the rising cost of living.
His message has at times been different from the CPC under O’Toole, in large part due to the fact that it is consistent and is actually Conservative.
And Poilievre’s latest ad – in which he encapsulates many of his key messages in 30 seconds – is worth noting:
https://www.youtube.com/watch?v=r95Fu4C6ImU
There are a few interesting things here.
First, this shows that you can get across important concepts in a short period of time, something the CPC has struggled to do.
Poilievre links things people are seeing all around them – higher prices for homes, gasoline, food, and more – to the policies of Justin Trudeau.
He also explains inflation effectively, as more spending leads to a decline in the value of our money, meaning people are – in real terms – getting poorer.
And then, Poilievre effectively avoids the mistake many fiscal conservatives make. Often, it’s easy to come across as ‘depressing’ or ‘draconian’ when we talk about fiscal responsibility, but Poilievre points out how this can be an optimistic way of thinking, because getting spending and debt under control creates more opportunity for the creation of real wealth and real jobs.
He also throws in some ‘Made in Canada’ economic nationalism, an agenda that has worked well for Conservatives across the Western world.
Interesting political analysis
So, from the content side of things, Poilievre’s message is effective.
And when we do a political analysis of it, some interesting themes also emerge.
First, note how the ad doesn’t say anything about the CPC national brand or Erin O’Toole.
I don’t interpret that as an attack on O’Toole. However, it does show that there is an effort to emphasize Poilievre’s personal brand.
That is not a surprise, considering that the CPC itself, and centre-right ideas are polling much higher than O’Toole does.
If MPs behind the scenes are seeing horrific poll numbers, and if O’Toole continues to languish as an unpopular figure, those MPs will have to do what is necessary to protect themselves in an upcoming election.
As you can see, the Poilievre ad is from the ‘Carleton Conservative Association’, not the CPC itself.
I would expect to see more of this, not only from Poilievre but also from other MPs who have their own strong personal brands.
This is also interesting for the long-term of the CPC, as we are seeing some ideological contours of what could be a future CPC leadership race.
That aside, the CPC would benefit mightily from fully embracing the message Poilievre is sharing in his ad, because it’s a message Canadians need to see and hear.
We cannot allow a far-left economic consensus to entrench itself at the federal level, and support those like Poilievre who are pushing back is key to preserving fiscal responsibility in Canada.
Spencer Fernando
Photo – YouTube
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