Mark Slapinski

00:00:00.160 CTV now admits that Kearney's days, they're numbered.

00:00:03.560 And when I say numbered, I mean it could all come crashing down as early as tomorrow.

00:00:08.020 But right now we want to drill down on the possible content of this budget.

00:00:11.760 It's significance to Canadians and of course really to the economy more largely.

00:00:18.400 This budget comes after a long wait.

00:00:20.740 It's been since spring of 2024 that we've seen a budget tabled.

00:00:23.780 There was of course last December a fall economic statement,

00:00:26.600 but that was buried by Chrystia Freeland resigning that day. 0.89

00:00:30.040 So it's been a long time coming, I guess you could say.

00:00:33.020 And here to help us unpack the potential significance from an economic perspective of this budget,

00:00:39.120 our three experts in the field.

00:00:40.480 Former Finance Minister John Manley is with us.

00:00:42.500 He's the chair of Jefferies Financial Canada and the chair of the Telescorp board.

00:00:46.820 Jean-François Perrault is Scotiabank's senior vice president and chief economist.

00:00:51.420 And rounding us out this evening is CTV News chief financial correspondent Amanda Lang.

00:00:55.960 Hi everybody, it's good to see you tonight.

00:00:57.400 Thank you very much for making the time.

00:00:59.060 Amanda, I will start with you because I noticed today,

00:01:01.620 and my colleague Abigail Beeman was reporting earlier,

00:01:04.240 the finance minister did not call this today a budget of investment and austerity,

00:01:08.340 like we heard the prime minister say a few months ago.

00:01:10.700 He used the word investment over and over again.

00:01:13.520 What does that tell you?

00:01:15.340 I mean, I think it tells us that they want us to focus on where we're going.

00:01:19.320 This is a budget that will be a vision of what Canada can do

00:01:22.180 in the face of some pretty dire circumstances.

00:01:24.080 It's also obviously going to have to lay out some details around what it does

00:01:28.400 in the face of lower revenue and a real economic challenge.

00:01:32.140 So I've actually wondered, Vashi, whether that word austerity from the prime minister

00:01:35.760 wasn't so much about the cuts he's going to present,

00:01:38.280 although we do expect to see some of that,

00:01:40.860 but about what the government itself is dealing with.

00:01:43.300 It is actually dealing with, of course,

00:01:45.400 arguably a weaker revenue outlook in the face of everything that's going on,

00:01:49.460 and yet it has to spend.

00:01:50.920 So it's this weird kind of push-full situation.

00:01:54.100 Former finance minister Manley must be being glad he's not there trying to do it,

00:01:58.600 where you have to invest and you've got less money to do it with.

00:02:02.020 John, let me jump off that point and ask you,

00:02:04.580 like what kind of conundrum in that vein do you think this government faces?

00:02:07.600 Well, first of all, they've got to worry about our fiscal situation.

00:02:13.780 We haven't really followed a fiscal anchor in quite a long time in Canada,

00:02:18.660 and eventually that catches up with you.

00:02:22.280 You know, we reached a point in the early days of the Khrushchev government

00:02:26.020 when we almost couldn't float our bonds on the international markets

00:02:29.940 because, strangely enough, when you borrow money,

00:02:32.120 the people lend it to you, want to be sure that they're going to get repaid

00:02:36.060 and that they're going to earn a return on it.

00:02:37.980 So what's the fiscal anchor going to be is one big question.

00:02:42.400 The prime minister in his campaign promised a different way of accounting,

00:02:47.680 a capital budget and an expenditure budget or a consumption budget, if you like,

00:02:53.320 the capital budget being for investments,

00:02:56.100 and said that we'll balance the other budget, the expenditure budget,

00:03:00.400 while we're borrowing to do capital investments.

00:03:03.000 Well, let's see what that actually means.

00:03:06.580 How do they define it?

00:03:08.540 An investment to me means you're putting money into something that's going to pay a return.

00:03:13.600 You know, we've seen lots of things called investments over the past.

00:03:17.460 They don't necessarily pay returns to the government.

00:03:19.960 All right.

00:03:20.320 So let me break this down for you.

00:03:22.020 Canada is going bankrupt.

00:03:24.200 That's just a nice way of saying it, what he said.

00:03:26.620 I'm saying it a little bit more directly.

00:03:28.500 All Carney is doing is he's using nice words to cover up the fact that Canada is going to go bankrupt.

00:03:35.440 Like I said in yesterday's video, our country, Canada, has more resources than Saudi Arabia.

00:03:41.200 But you look at Saudi Arabia, everyone's driving around nice cars.

00:03:44.240 They have nice pets.

00:03:45.200 They live in big houses.

00:03:46.640 You look at Canada.

00:03:47.840 People are literally starving.

00:03:49.680 And I'll have more to say on that later in the video.

00:03:51.880 Before we go any further, I want to remind you I'm being censored.

00:03:55.100 If you see this part, let me know in the comment section.

00:03:57.100 Give me a like and make sure you're still subscribed.

00:04:00.180 People complain all the time.

00:04:01.520 They say, Mark, I subscribe to you, but I don't see your videos.

00:04:04.900 Or they say I subscribe to you, but YouTube unsubscribed me against my knowledge.

00:04:10.220 So just double check.

00:04:11.940 Jean-François, I wondered if you could paint a picture for us of the level of uncertainty in the economy that they face right now.

00:04:18.740 Like what are the headwinds that in part this trade war has brought upon us?

00:04:23.040 Yeah, and I think that's an extremely important way to think about the budget that will be announced tomorrow.

00:04:31.640 And the government of the Bank of Canada has talked about this extensively as well.

00:04:34.520 I mean, the economy is weak.

00:04:36.280 There's no question about that.

00:04:37.480 But it's weak for two reasons.

00:04:40.160 It's weak in part structurally.

00:04:41.940 It's weak because productivity has been low for a long time.

00:04:43.840 Investment has been low.

00:04:45.360 And that creates kind of a weak economy with which to deal with the types of shocks that we're dealing with now.

00:04:52.180 But importantly, what's going on in the context of this trade conflict with the Americans and this broader realignment of economic activity is a need to transform the economy, which, of course, the prime minister campaigned on very effectively.

00:05:05.120 And that will entail a need for significant amounts of investments, ideally by the private sector, but obviously with some government assistance of some form, to help the economy kind of transition from the world in which we've been operating to the world in which we will be operating over the next few years and then maybe longer than that.

00:05:24.740 So that's a tricky thing for governments to manage.

00:05:27.900 You know, how do we how do we think about fiscal policy in that context?

00:05:30.900 How do we think about the size of the budget deficit that is required?

00:05:34.360 Is the budget deficit required to kickstart the economy, kickstart this transformation?

00:05:38.880 Of course, the government is making that an informed decision.

00:05:41.400 I suspect that that is the case, that we do need some government assistance, some government help to, you know, start that transition to catalyze investment.

00:05:50.040 But, of course, how effective they will be will depend to some extent on what's in the budget tomorrow and how they go about convincing us that they are doing the right things for us.

00:05:59.560 So the finance minister asks you, Amanda, you know, what advice do you have for me?

00:06:03.360 I want to catalyze private investment because exactly what Jean-Francois said in that vein is what we have heard.

00:06:08.920 The prime minister in particular say that will be the objective of either policy or the investments ultimately that they make on that so-called side of the ledger.

00:06:17.020 What kinds of policies or investments, in your view, would be effective in that manner?

00:06:22.360 So the problem here, Vashi, is there's nothing new.

00:06:25.800 They're not reinventing anything.

00:06:27.840 The way you catalyze investment is create circumstances that create confidence.

00:06:32.900 So you want to invite capital in, which means that you're reducing your red tape and your government regulations.

00:06:38.260 You could lower corporate taxes.

00:06:39.920 You could do things to incentivize investment by business.

00:06:42.900 But we've done those things in the past and we haven't seen a massive return and we're in an emergency.

00:06:49.380 So the real problem here is we actually need government spending that actually creates almost a near term return.

00:06:56.080 So when we think about this new ledger they're going to present with this long term kind of capital investment spending, it sounds great.

00:07:02.100 And there is a real benefit in that.

00:07:04.720 But you can say we're building a mine in northern Ontario that the actual economic payoff of that is way down the road.

00:07:12.180 And housing, you know, you can create construction jobs in the near term fashion by investing in housing.

00:07:16.580 Housing is kind of non-productive to productive capital investment.

00:07:19.660 So how do you actually create economic growth in Canada?

00:07:23.220 It's with trade.

00:07:24.220 We have to trade with the rest of the world.

00:07:25.880 And that's not necessarily an investment so much as trade deals and policies that spur activity.

00:07:31.120 Did you hear that? 0.99

00:07:32.380 CTV is basically admitting that Canada is fucked. 0.99

00:07:35.200 And we're fucked because we're not doing enough trade with the rest of the world. 1.00

00:07:38.860 And remind me for a second. 0.99

00:07:40.300 Whose responsibility was it to get us on track?

00:07:43.120 Hmm.

00:07:43.980 Maybe the prime minister?

00:07:46.040 Maybe the same guy that said he was going to get a good deal with Donald Trump?

00:07:49.120 Maybe the same guy that sold us, sold himself as the person, this economic genius that was going to sort everything out.

00:07:56.160 Maybe that guy?

00:07:57.220 Now, of course, these liberal hacks, they all got their checks in the mail.

00:08:00.540 They won't say the quiet part out loud.

00:08:02.440 But that's what I'm here for.

00:08:03.980 Are you concerned at all, John, about sort of what Amanda lays out there?

00:08:08.200 Which is, when we say the word transform, like, by its own nature, that's not something that happens overnight.

00:08:14.120 So, like, what will be or what could be stimulative in the near term without adding to the fiscal issues that you already laid out?

00:08:25.140 Well, I think there are a few items that Amanda's already mentioned.

00:08:29.540 I mean, clearly, you've got to get your investment climate right.

00:08:32.920 We're net importers of capital.

00:08:34.640 We need the capital to do the works that need to be done, whether they're long-term or short-term.

00:08:39.360 And that means that investors have to have some confidence that they can get to a yes when they want to build a project.

00:08:47.440 They have to be satisfied that the returns they're going to get are as good or better than the returns they can get elsewhere.

00:08:55.200 And that means, in part, we've got to be able to demonstrate that we have access to international markets, including the United States.

00:09:02.140 It doesn't have to be tariff-free.

00:09:03.760 We can deal with tariffs.

00:09:06.500 But other markets as well.

00:09:08.380 We're rich in natural resources.

00:09:11.260 We've been very poor at getting those out of the ground and into foreign hands, where we want to sell them in order to get the returns on them.

00:09:21.040 But that's the quickest way for us to earn the kind of money that we need to make, is to get those resources to markets.

00:09:29.520 And it means regulatory reforms, and it means that we've got to have the prime minister and a cabinet and provincial premiers that are out there saying, we can do this.

00:09:42.260 We are going to do this.

00:09:43.520 We're going to strip down those interprovincial trade barriers once and for all.

00:09:47.700 We're going to build the infrastructure necessary in our ports, on our highways, our transportation systems, not just pipelines, but all of the other things that we need to do in order to get our goods into foreign hands.

00:10:00.420 Now, I do know a politician that was willing to do all those things.

00:10:04.060 I forget his name, though.

00:10:05.100 He was a tall, muscular, good-looking guy.

00:10:08.400 He's got his hair slicked back.

00:10:09.980 He used to wear glasses.

00:10:11.020 Now he doesn't.

00:10:12.240 I think his wife is South American, maybe Colombian, Venezuelan.

00:10:16.800 If you know his name, let me know in the comments section.

00:10:20.120 Jean-François, what is your perspective on, and what we've kind of talked about in laying out things they can do near-term, mid-term, long-term, your perspective on the fiscal situation?

00:10:30.840 There's been a ton of conversation, sometimes debate about how sustainable or not the federal government's finances are.

00:10:37.200 What is your level of concern about, let's say, a $75 billion deficit?

00:10:42.140 What does it mean to you?

00:10:43.020 I'm not overly concerned with the short-term deficit number.

00:10:50.300 Clearly, it's going to be a big number.

00:10:51.740 It's the $75,000, $80,000, $100,000.

00:10:53.180 I mean, we'll see.

00:10:54.920 What I'm worried about or what I'm more interested in is the path going forward as a kind of a secondary consideration to what you're actually getting for the $75,000, $80,000, whatever the deficit's going to be in the short run.

00:11:06.520 If you have a deficit that generates growth that, again, catalyzes an investment that leads to stronger private sector investment next year, and even more so hopefully beyond that, that's an entirely different context in which you evaluate whether a budget deficit is sustainable or not.

00:11:22.140 And historically, of course, that's not been the case.

00:11:25.060 We run big deficits.

00:11:25.960 It's not led to the type of investment that would increase what we call potential output growth or median term growth.

00:11:32.160 If there's elements of this budget that stream transformation that are clearly going to lead to higher private sector investment, that will lead to higher productivity, you know, if that costs us a little bit in the short run to kickstart that, I think that's okay.

00:11:49.220 Now, if this time next year we're having this conversation and we've done the $75 or $100 billion deficit and productivity hasn't turned around, there isn't any early evidence that the private sector is doing anything differently, then it's a very different story, very different conversation we're going to have.

00:12:03.500 But right now, you know, we've got a government that seems to understand the challenges we're facing, that we need a lot more investment.

00:12:08.880 They're focused on that.

00:12:09.780 Part of the reason I think they have this split between operating capital is to signal that they're really serious about the capital side of things.

00:12:16.000 And that gives me a greater degree of comfort that they will do the right things tomorrow and in months beyond that relative to, say, previous governments who were less focused on, you know, increasing capital stock.

00:12:31.160 Amanda, the government has signaled a lot about what they want Canadians to know will be in this budget.

00:12:36.720 Is there something that they haven't signaled yet that you would like to see explained, you know, detailed in the budget in some way?

00:12:46.000 Do you know what, Vashti, as we have this conversation, what I'm really thinking about is I want to be surprised by something.

00:12:50.740 I want to see something they haven't shared with us yet that's really visionary that makes me say, yes, this gives me confidence.

00:12:58.620 You know, to GF's point, you can spend an awful lot of money.

00:13:01.800 And if you're fighting off an emergency, your house is on fire, you need to put the fire out.

00:13:07.660 If you've ever seen a house after it's been fire hosed, it doesn't look very good.

00:13:11.540 You can spend a lot of money and not get anywhere.

00:13:14.400 And then you've got this massive debt.

00:13:16.040 What we would all, I think, like to see is something we haven't heard yet, something that will actually propel the country in some direction where the investment makes sense and will actually kind of galvanize, not just us, but foreign investors as well, that there's a real kind of vision for the future here.

00:13:32.560 I'm not saying we're going to get it.

00:13:33.980 I'm just that's what I wish for, because that's that's really what we need right now.

00:13:37.480 This is an emergency, but we can't waste the opportunity and spend on things that don't make a difference.

00:13:42.160 So there you have it. CTV is literally admitting on live television that Canada is going bankrupt and Carney is to blame.

00:13:49.220 Of course, they can't say it as directly as I can, but that's really what they're getting at.

00:13:53.880 And based on their assessment, which aligns with my assessment and the assessment of many conservatives, Carney is not going to be around much longer.

00:14:01.700 Think about it. If you're a prime minister and you sold yourself as an economic genius and now you have plans to literally bankrupt the country, you're not going to stick around very long.

00:14:11.220 Eventually, people are going to figure out what's happening and they're going to turn on you.

00:14:15.640 And I believe the way Carney is going, it's only a matter of time.

00:14:18.840 Now, of course, I can't predict the future and I hate to make predictions, but two things are going to happen.

00:14:23.940 Either the budget goes through and Carney sticks around or the opposition parties can vote against it and Carney's gone.

00:14:31.720 Now, I really don't want to say which one is more likely, but I'll tell you what I want to happen.

00:14:36.280 I'll be straight with you. Conservatives have seen a promising rise in the polls, and that's great.

00:14:41.420 However, I don't think we're ready as conservatives for a Christmas election.

00:14:45.420 It's too early.

00:14:46.860 In a roundabout way, I think it's actually better if the budget vote does pass and Carney sticks around a little bit longer.

00:14:53.900 But hear me out here.

00:14:55.080 Having Carney stick around a little bit longer gives them a bit more time to make mistakes.

00:14:59.120 It gives Canadians a bit more time to realize the mistake they made in voting for him, at least the liberals.

00:15:04.620 And it gives us time to get our plan together.

00:15:07.680 Because I believe the conservatives are going to win, and they're going to win big.

00:15:10.680 And we're going to get a supermajority, but it's going to take a little bit more time.

00:15:14.900 Now, I know, I know that's not the news you want to hear.

00:15:18.220 But we've got to look at the long game.

00:15:20.060 I'm looking at 10, 15 years of a conservative supermajority government.

00:15:24.520 And that's going to take time.

00:15:26.140 We've survived 10 years of the liberals, so I think we can hold on just a little bit longer.

00:15:30.080 But worry not, it's only a matter of time before we're living like the Saudis. 1.00

00:15:34.440 We're going to be driving nice cars, living in nice mansions, owning exotic animals, and going on trips at least twice a year.

00:15:42.340 Just hang in there.

00:15:43.480 Have some more faith.

00:15:44.760 Have a bit more patience.

00:15:46.060 We're going to win, and we're going to win big.

00:15:48.180 Have a great night.

00:15:49.220 Talk to you tomorrow, patriots.

CTV Panelists Sound Alarm Over Carney's Budget

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