Juno News - May 06, 2025


Could Mark Carney risk Canada's AAA credit rating？


Episode Stats


Length

15 minutes

Words per minute

151.76181

Word count

2,399

Sentence count

119


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

A major credit rating agency released a forecast warning that Canada could lose its AAA credit rating should the newly elected Liberal government implement the spending promised in their platform. Ontario Premier Doug Ford has sent a letter to newly elected Prime Minister Mark Kearney demanding federal funding for several major provincial projects. The Alberta NDP has voted to split from its federal counterpart after its crushing defeat in the general election.

Transcript

Transcript generated with Whisper (turbo).
00:00:00.000 A major credit rating agency released a forecast warning that Canada could lose its AAA credit rating
00:00:11.060 should the Kearney Liberals implement the spending promised in their platform.
00:00:16.120 Ontario Premier Doug Ford has sent a letter to newly elected Prime Minister Mark Kearney
00:00:20.580 demanding federal funding for several major provincial projects.
00:00:24.100 The Alberta NDP has voted to split from its federal counterpart after its crushing defeat in the general election.
00:00:31.960 Hello Canada, it's Tuesday, May 6th, and this is the True North Daily Brief.
00:00:36.340 I'm Cosmin Gerja.
00:00:38.060 And I'm Geoff Knight.
00:00:39.140 We've got you covered with all the news you need to know.
00:00:42.220 Let's discuss the top stories of the day and the True North exclusives you won't hear anywhere else.
00:00:47.500 Fitch Ratings has warned that Canada's coveted AAA credit rating may be at risk
00:00:56.260 if Prime Minister Mark Kearney's newly elected liberal minority government
00:01:00.200 follows through on its $130 billion platform.
00:01:04.560 Kearney, who replaced Justin Trudeau as Liberal leader in March,
00:01:08.120 led the party to a narrow fourth consecutive election win last week.
00:01:12.080 However, with only 168 seats, the Liberals are forming another tenuous minority government
00:01:18.580 and must rely on opposition parties to pass legislation.
00:01:22.920 Fitch estimates that if the Liberals deliver on all of their spending promises,
00:01:27.220 Canada's general government deficits will rise to 3.1% of GDP in 2025
00:01:33.360 and 3.2% in 2026, far above the pre-pandemic average.
00:01:39.900 In contrast, the agency had projected deficits of 2.7% and 2.4% respectively
00:01:46.660 with former Prime Minister Justin Trudeau.
00:01:49.880 The rating agency said these deficit levels,
00:01:52.780 approaching those seen only during the 2008 recession and COVID-19 pandemic,
00:01:58.520 risk pushing Canada's gross general government debt above 90% of GDP,
00:02:03.920 nearly double the median for AA-rated peers.
00:02:06.700 Currently, Canada holds an AA-plus rating with Fitch.
00:02:10.900 Other major credit rating agencies like S&P, Moody's and DBRS have rated Canada with AAA.
00:02:17.840 Federal deficits alone are set to hit $54.6 billion this year
00:02:22.960 and $43.4 billion next year under the platform,
00:02:27.460 up significantly from earlier forecasts.
00:02:30.080 Jean-Philippe Fournier, former policy advisor to Quebec's Ministry of Finance, said,
00:02:35.740 quote, the current Liberal plan needs to be modified
00:02:38.420 or it will put the financial viability of the federal government at risk.
00:02:43.000 Yet the Liberals claim only partial offsets through new taxes and efficiency measures,
00:02:48.000 many of which, Fitch says, rely on overly optimistic assumptions,
00:02:52.320 including uncertain revenues from retaliatory tariffs and government productivity gains.
00:02:57.420 In December, Fitch had projected a 1.1% deficit for 2025.
00:03:03.760 Now, under the Carney agenda, it seeks a risk of deficits nearly triple that amount.
00:03:09.100 In the same report, economic growth in Canada is forecast to slow to just 0.1% in 2025
00:03:15.440 and 0.5% in 2026.
00:03:20.200 So, Jeff, throughout the election, we saw not only Carney and the Liberals,
00:03:24.460 but the legacy media present Mark Carney,
00:03:27.940 the former governor of the Bank of England,
00:03:31.000 the former governor of the Bank of Canada,
00:03:33.660 this World Economic Forum guy,
00:03:36.060 as an economic genius or expert who has experienced weighting economies through troubling times.
00:03:45.900 But how does this Fitch forecast contrast with the way Mark Carney was presented
00:03:52.280 to the Canadian public during the election?
00:03:55.560 Yeah, Cosby, the Fitch ratings warning about Mark Carney's $130 billion spending plan
00:04:01.120 paints a stark contrast to how Carney presented himself during the 2025 election
00:04:05.740 as a competent economic expert.
00:04:08.460 Carney, leveraging his background,
00:04:10.640 campaigned heavily on his economic expertise,
00:04:13.160 promising to split the federal budget into operating in capital segments
00:04:16.400 and balance the operating budget within three years
00:04:18.780 while running deficits in the capital budget to catalyze investment.
00:04:22.560 He positioned himself as a steady hand,
00:04:24.780 telling Canadians in Charlottetown that his government would spend less and invest more,
00:04:28.980 framing his $130 billion in new measures as a strategic response
00:04:33.360 to a fundamental reordering of Canada's relationship with the U.S. and the global economy.
00:04:38.740 His pitch was rooted in technocratic credibility,
00:04:41.660 suggesting he could navigate Canada through economic turbulence,
00:04:45.260 particularly with U.S. President Donald Trump's tariff threats looming.
00:04:48.860 Fitch's forecast, however, undercuts this narrative with a grim outlook.
00:04:52.320 The agency warned that Carney's platform would worsen Canada's fiscal position,
00:04:56.220 projecting a 2025 general government deficit of 3.1% of GDP,
00:05:01.880 rising to 3.2% in 2026,
00:05:04.840 significantly higher than the 2.6% and 2.4% deficits
00:05:08.940 they had previously anticipated for those years under Trudeau's trajectory.
00:05:13.280 Fitch flagged that these increased structural deficits
00:05:15.960 would pressure Canada's credit profile,
00:05:18.480 despite the country's AA rating and economic stability offering some buffer.
00:05:22.160 They also noted the uncertainty of Carney's minority government,
00:05:25.000 suggesting that legislative compromises could further deviate from the platform's promises,
00:05:30.180 which adds more risk.
00:05:31.940 This forecast directly challenges Carney's image as a fiscal steward,
00:05:36.000 highlighting the potential for his plan to balloon deficits
00:05:38.400 and strain Canada's credit standing,
00:05:40.760 which are outcomes that clash with the economic discipline he claimed to embody.
00:05:44.280 While Carney sold himself as a pragmatic expert
00:05:46.480 who could manage Canada's finances through a crisis,
00:05:49.000 Fitch's analysis suggests that his approach might instead lead to greater economic vulnerability,
00:05:53.360 casting doubt on the very expertise he centred his campaign around.
00:06:00.700 Ontario Premier Doug Ford has penned a letter demanding further federal funding
00:06:04.720 for several provincial resource and transit projects amid a still-hot trade war with the U.S.
00:06:10.060 The letter, sent Monday,
00:06:11.460 urges newly elected Prime Minister Mark Carney to support several infrastructure projects
00:06:15.680 flagged as a priority for Ford and his progressive Conservative government.
00:06:18.800 Ford noted five projects for which he wants further federal funding
00:06:22.180 in partnership with Carney's Liberal government,
00:06:24.360 including all-season roads and electricity transmission lines to Ontario's Ring of Fire
00:06:28.700 to ensure an end-to-end, made-in-Canada, critical mineral supply chain.
00:06:32.700 He also called for federal backing on nuclear energy infrastructure,
00:06:36.180 a new northern seaport to bring Ontario goods to new markets,
00:06:39.680 a controversial transit tunnel under Highway 401,
00:06:43.080 and, quote,
00:06:43.500 Many of Ford's requests echo previous appeals for Liberal government funding
00:06:51.520 or were outlined in Ford's 2025 Ontario election campaign.
00:06:55.380 However, the request for a new northern seaport is new.
00:06:58.800 Ford envisions a James Bay port that would, quote,
00:07:01.280 serve as a gateway to our northern seas to bring Canadian resources to new markets,
00:07:06.240 helping to diversify Canada's trade and reduce our reliance on the U.S.
00:07:09.720 International ports fall under federal jurisdiction.
00:07:12.540 Specific figures on the scope and costs of the James Bay port have yet to be released,
00:07:17.160 but in comparison, the 2023 construction of the Iqaluit deep-sea port cost Nunavut approximately $84.9 million.
00:07:25.960 Ford has advocated for increased funding and partnership on most of these projects before the letter,
00:07:31.100 including the Ring of Fire development, nuclear energy, infrastructure, and transit projects.
00:07:36.160 Though operated by Metrolinx, which reports to the Ontario Ministry of Transportation,
00:07:40.060 the federal government has a history of funding GO Transit projects.
00:07:43.840 During the latest Ontario election in February,
00:07:46.720 Ford pledged to increase transit options in the Golden Horseshoe region, in the GTA, and in Toronto.
00:07:52.420 Opposition critics have criticized Ford's plan to build a driver and transit tunnel expressway under the 401.
00:07:57.500 Detractors say the project could cost up to $100 billion, making it potentially the most expensive project in the provinces.
00:08:04.380 Ford says that with the federal government's help, the tunnels could improve our economic competitiveness by acting as a shipping room.
00:08:10.120 Dr. Shoshana Sachs, a University of Toronto associate professor in the school's Department of Civil and Mineral Engineering,
00:08:16.680 estimated the tunnel could cost approximately $1 billion per kilometer.
00:08:20.340 Though Ford's government hasn't released information on the length of the project,
00:08:23.700 Sachs estimates it could cost taxpayers $55 billion.
00:08:27.040 So, Cosman, could Doug Ford's behavior during the campaign and attempts to throw shade at the federal conservatives
00:08:32.500 have been a way to gain favor with Kearney to fund these projects?
00:08:35.580 Yeah, absolutely. And when you just look at these projects themselves, right,
00:08:39.980 these are things that the liberals, by and large, have already funded.
00:08:44.400 So asking for more money on projects that already have funding agreements is just an extension of funding agreements.
00:08:52.540 And one of the things we didn't discuss here is, like, the nuclear reactor stuff.
00:08:57.500 Like, several provinces have asked for funding for small nuclear reactor research and development,
00:09:04.600 which I don't think is a bad thing. I think it's a good thing.
00:09:07.780 But there's already been a federal commitment to that.
00:09:10.780 So to the Ontario government, if the liberals have already committed to funding,
00:09:15.680 extending that funding further and making a request clearly outlining these programs,
00:09:21.200 which have already been greenlit, by and large.
00:09:24.660 A few haven't, like the Ring of Fire stuff and a couple others in that letter.
00:09:29.480 But it's just an extension of that funding.
00:09:32.900 And I'm not so sure that Pierre Polyev would have agreed with Ford on all of these.
00:09:39.120 In the sense, I don't think he would have played nice with Ford just due to his behavior during the campaign.
00:09:46.740 We know that conservative leader Pierre Polyev wants to develop the Ring of Fire.
00:09:52.400 He made it one of his key campaign promises with regard to natural resource development.
00:09:59.180 But I think Doug Ford pretty much hedged his bets in a way,
00:10:03.460 knowing that, well, here are some things in my re-election platform when he went up to the ballot
00:10:10.480 that I know the conservatives would fund,
00:10:14.100 while I can play the other side with Mark Carney
00:10:17.140 and appeal to him, knowing that federal funds will continue to flow to certain programs I want,
00:10:23.380 and I can try to make a case for the new ones that I pledged in my re-election platform.
00:10:31.920 Despite Alberta NDP leader Nahid Nenshi criticizing Alberta Premier Daniel Smith
00:10:37.480 amid the province's growing separatist movement,
00:10:40.440 he is now applauding a separation movement of his own.
00:10:43.340 Alberta's new Democratic Party delegates have voted to allow its members to opt out
00:10:48.660 of joining the federal NDP at Sunday's annual party convention in Edmonton.
00:10:54.000 This comes as an attempt to distinguish the highly unpopular federal party
00:10:58.100 from the provincial opposition party in public optics.
00:11:02.540 NDP leader Nahid Nenshi shared remarks celebrating this action, saying,
00:11:07.000 quote,
00:11:07.400 This is a great movement for the very, very many thousands and thousands of Albertans
00:11:12.720 who really like what the Alberta NDP have to say,
00:11:15.940 but don't necessarily agree with the federal party,
00:11:18.900 and this now gives them that choice.
00:11:21.260 Until now, Alberta NDP members were automatically signed up as federal NDP members,
00:11:27.040 a practice Nenshi described as a political liability.
00:11:30.860 The vote, which required two-thirds support,
00:11:33.180 passed with only a small minority of delegates standing in opposition.
00:11:37.400 In a crowd of more than 1,000, just two or three dozen expressed dissent.
00:11:42.580 Nenshi dismissed those concerns.
00:11:44.740 Nenshi said, quote,
00:11:46.300 It's saying to everyone, look, you're welcome here,
00:11:48.980 adding that the Alberta NDP remains financially and politically independent.
00:11:53.640 The move also signals a departure from the legacy of former leader Rachel Notley,
00:11:58.700 who last year called the idea of separating from the federal party, quote,
00:12:03.260 short-sighted and superficial.
00:12:05.040 Nenshi's broader mandate, however, appears solidified.
00:12:09.300 In his first leadership review, Nenshi received 89.5% support from delegates,
00:12:15.460 up from the 86% he received during last year's leadership contest.
00:12:20.520 However, Elections Alberta cited the Alberta NDP for inflating membership numbers during Nenshi's
00:12:26.220 leadership race.
00:12:27.440 The Alberta NDP was treating donations as automatic membership renewals,
00:12:32.800 which violated election rules.
00:12:35.200 Premier Daniel Smith, speaking in the legislature ahead of the convention,
00:12:39.540 said the vote reflects the Alberta NDP's attempt to distance itself from a, quote,
00:12:44.500 damaged brand, pointing to the federal NDP's losses in last Monday's federal election,
00:12:50.420 where it dropped 17 seats and lost official party status.
00:12:53.940 Nenshi rejected the characterization, accusing Smith of misrepresenting the move.
00:13:00.080 Just to go more off of, uh, Danielle Smith's comments there,
00:13:03.640 is this a rebranding project for the Alberta NDP, Jeff?
00:13:07.720 Can Albertans actually expect that Nahid Nenshi's party will have any different values than the federal
00:13:14.340 NDP instead of just a rebrand?
00:13:17.500 The NDP's decision to allow members to opt out of federal NDP membership voted on at their annual
00:13:23.780 convention in Edmonton marks a clear rebranding effort under Nahid Nenshi's leadership.
00:13:28.580 Nenshi himself framed the move as a way to broaden the party's appeal, saying, quote,
00:13:32.680 this is a great movement for the very, very many thousands and thousands of Albertans who really
00:13:37.120 like what the Alberta NDP have to say, but don't necessarily agree with the federal party,
00:13:41.940 and this now gives them that choice. The overwhelming support for the change,
00:13:46.240 passing with only a small minority of the over 1,000 delegates dissenting,
00:13:50.600 shows a strategic pivot to distance the provincial party from the federal NDP,
00:13:54.860 which Premier Daniel Smith called a damaged brand after its recent federal election losses.
00:14:00.080 This rebranding is further underscored by Nenshi's rejection of Smith's characterization
00:14:04.140 and his emphasis on the Alberta NDP's financial and political independence, aiming to shed the
00:14:09.800 perception of being tied to an unpopular federal entity. The move also breaks from Rachel Notley's
00:14:14.800 legacy, who had dismissed separations as short-sighted and superficial, signaling a new
00:14:20.420 direction under Nenshi, who enjoys strong support with an 89.5% approval rating in his first leadership
00:14:26.340 review. However, whether Albertans can expect the Alberta NDP under Nenshi to have meaningfully
00:14:31.820 different values from the federal NDP is less clear. The structural separation does allow the
00:14:36.840 Alberta NDP to carve out a more Alberta-centric identity, particularly on issues like the oil and
00:14:42.380 gas industry, which the federal NDP has often opposed. Their 2021 platform, for instance,
00:14:47.860 criticized pipeline projects like Trans Mountain, a stance that doesn't sit well in Alberta.
00:14:52.760 Nenshi's rhetoric about welcoming all Albertans and focusing on local priorities suggests a pragmatic
00:14:57.500 shift, likely to better appeal to rural and resource-focused voters who have been
00:15:01.800 weary, who have been wary of the federal NDP's environmental policies. Yet the Alberta NDP's
00:15:06.820 core values remain progressive at heart, emphasizing social equity, health care, and education,
00:15:12.660 much like the federal NDP. Nenshi's high approval rating indicates party members still align with
00:15:17.540 these ideals, even if tailored to Alberta's context. So while the rebranding creates space for a more
00:15:22.700 distinct provincial identity, Albertans shouldn't expect a fundamental departure from the federal NDP's
00:15:27.880 progressive values, just a more localized, resource-friendly spin on them.
00:15:34.980 That's it for today, folks. Thanks for tuning in. You can stay on top of new episodes every weekday by
00:15:40.340 subscribing to The Daily Brief on iTunes and Spotify. Also, while you're at it, make sure to hit us with
00:15:46.000 a five-star rating and please leave a review.