Mark Carney has been appointed as the new Governor of the Bank of Canada, and he's already running a deficit of $92 billion in the year 2025, and it's only going to get worse. I talk about why this is a big deal, and why we should be worried about it.
00:00:34.900He was Justin Trudeau's economic advisor for five years.
00:00:38.960People should have probably noticed the giant red flag on the field about his own fiscal responsibility.
00:00:45.580Do you think that when Justin Trudeau was prime minister, that Mark Carney would bring him ideas or advice and Trudeau would be like,
00:00:53.180well, that's cute, Mark. I'm going to do what I already wanted to do.
00:00:57.080Or do you think that Trudeau probably did whatever Mark Carney said because Justin Trudeau was deeply incompetent and I don't think was really making any of his own decisions?
00:01:05.660He relied on a handful of advisors, a few trusted ministers, and people like Mark Carney, and that was it.
00:01:13.280So when Mark Carney comes in now and is now running us a $92 billion deficit in the year 2025, nobody should be shocked.
00:01:20.960And by the way, the deficit is going to rise higher because previously estimates about how bad the deficit was going to be,
00:01:30.120which had said that maximum we're going to be at $90 billion, well, we're already at $92 billion and we're not going to have the digital services tax revenues.
00:01:38.300And I guarantee government revenue estimates are not actually going to be how they come in.
00:01:45.360It tends to be, if you're a fiscally conservative government like the UCP government in Alberta, you may project a $5 billion deficit.
00:01:53.800And then when you actually have the revenues come in because you're being a little more pessimistic, you actually have an $8 billion surplus.
00:02:00.900That's how Alberta is doing right now.
00:02:03.060So when the liberal government, who for years has always been saying $40 billion deficit max, that's our red line, then they come in at $62 billion.
00:02:12.340Well, right now with the government watchdog saying $90 billion, $92 billion, I think we can maybe ballpark this at over $100 or $110 billion.
00:02:23.580I think I said $90 million, I meant billion.
00:02:29.880And this was, again, very foreseeable.
00:02:32.700But I just want to cut to some of the news about this specific deficit.
00:02:36.820Then I also want to talk a little bit later about just honestly how simple-minded Mark Carney is when it comes to the economy.
00:02:44.240It doesn't mean he can't do some good stuff.
00:02:46.420He may still be more competent than Justin Trudeau.
00:02:49.480Justin Trudeau, again, relied on people like Carney, but maybe Carney has some slightly better ideas now that he's trying to seem different than what Trudeau's government was like.
00:02:59.920But overall, I don't think it's going to be great.
00:03:02.600I want to talk about some of the stuff he's trying to celebrate as big economic wins, that if you know how the economy works, you know that these are not economic wins.
00:03:11.780These are surface-level, patriotic, I guess, it's just patriotic nonsense.
00:03:17.160The idea that people are buying more Canadian equals good economy.
00:03:22.280But before I get into it further, guys, I just want to remind you, if you like the show, make sure to leave a like on the video, subscribe to the channel, hit the subscribe button if you are not yet a subscriber,
00:03:31.780and leave a comment on what you think the deficit is going to be at the very end of the year.
00:03:38.780Again, there's a reason why Carney is actually ducking the parliamentary budget officer.
00:03:44.280He is not giving him any data when it comes to the spending.
00:03:49.300They're not even, they're not allowing them to do any accounting for the spending.
00:03:52.480So when they're not even letting the parliamentary budget officer look at the numbers, you can be guaranteed $92 billion is right now a conservative estimate on how bad the deficit could possibly get.
00:04:04.360But this was from the National Post article written on it.
00:04:07.660And this was from the C.D. Howe, from C.D. Howe, who was talking about the current projections for the deficit.
00:04:15.980And they said, quote, it is widely accepted that Canada's economy is at a critical crossroads.
00:04:21.660They go on to say, so are Canada's finances beyond the economic drag of high deficits arising?
00:04:27.620It is unfair to pass these burdens to the current young and future generations.
00:04:32.960And this is what I wanted to highlight down here, because it's absolutely ridiculous that this is the kind of numbers they were putting out just a few months ago, obviously during the election.
00:04:42.200It says, just four months ago, the parliamentary budget officer projected that the federal deficit would fall to $50.1 billion during this fiscal year.
00:04:51.660A slight improvement over the $61.9 billion shortfall recorded in 2023-2024.
00:04:58.880The PBO also said at the time that federal deficits would continue to fall in the ensuing years unless there were new measures to cut revenues or increase spending.
00:05:25.960But I just want to jump over to something else, because I think what the Globe and Mail is doing in this article I'm about to show is trying to front run what Mark Carney is going to do.
00:05:37.260Mark Carney is delivering a very small tax cut.
00:05:41.500It's 1% lower rate of taxation under $50,000 in which you don't even pay any tax on the first $18,000.
00:05:49.980They are saying we're going to give Canadians back $850 or every Canadian household is going to get an average back of $850.
00:05:58.080And they found that the average household could get as low as $230 back or, you know, maybe $400.
00:06:07.100It's what you get back on your, like, cash back credit card in a year.
00:06:11.800Your 1% cash back credit card, it generates more money than his tax cut is.
00:06:17.820But look at this headline from the Globe and Mail.
00:06:20.060Now, Canada should consider hiking consumption taxes to pay for a defense spending boost analysts.
00:06:28.200This is by Stephen Chase at the Globe and Mail, a very senior Globe and Mail writer.
00:06:32.960And what this tells me, and they go over how much our defense spending is going to go up under Carney.
00:06:38.400And by the way, our defense spending should go up.
00:06:41.300The only thing I don't trust about the Liberals is that they've had a long time to increase defense spending.
00:06:45.600And they've hollowed out the military so much with it becoming basically a giant bureaucracy and HR department rather than a real military.
00:06:53.780I'm very pessimistic that they're just going to dump more money into non-military military spending.
00:07:00.760It's like how our healthcare systems have a lot of money in them.
00:07:04.000But if you actually broke down how much money is being spent on people doing paperwork about nothing, it would really shock you.
00:07:10.600How many people are working HR jobs, DEI training positions that are in the healthcare budget, which obviously don't really represent healthcare in any way.
00:07:21.400But I think what the Globe and Mail is doing here is front running that they are probably going to potentially increase consumption taxes.
00:07:29.760The GST might go from 5% to 7% or 8% in order to get the money back that the government needs to be able to lower its deficit and pay for all the defense spending.
00:07:40.220Because I don't even think they have actually yet added in all the defense spending commitments that Carney has made.
00:07:46.720When they projected $90 billion, that's back when he said he was going to try and ramp up spending to 2%.
00:07:52.420Now we're actually already saying 5%, which is a bit of a fudged number because 5% is also going to include certain critical infrastructure key for defense or whatever.
00:08:02.960But still, we couldn't really afford to go to 2% this fast.
00:08:08.620Again, we maybe should be going to it.
00:08:11.200But unless you're going to be cutting wasteful spending, which is a perfectly fine way of paying for 2% defense spending if you're going to cut wasteful spending elsewhere.
00:09:30.680He kept rose interest rates in order to make sure that our economy wouldn't like, you know, wouldn't suffer from massive inflation.
00:09:38.400You know, keep us on a good fiscal path in the UK.
00:09:43.640His reviews as the governor of the Bank of England were not great.
00:09:47.760If you follow Liz Truss, he was actually kind of a bit of a bully wanting to push his vision for how to basically recover the UK economy,
00:09:55.360which was inflationary spending, lowering interest rates, and which has turned the UK economy into a very poor quality economy with very high prices because of the massive amounts of inflationary spending that didn't actually increase productivity.
00:10:14.520It just tried to artificially spur investment.
00:10:18.720And then again, in Brookfield Asset Management, he, again, it's mostly his network that got him a bunch of money into Brookfield.
00:10:26.440His success mostly just has to do with his network, not his, you know, business prowess.
00:10:31.280It's because he invests in industries that he knows that there are massive government subsidies.
00:10:35.580And that's not everything Brookfield does.
00:10:37.620But a lot of the big carny successes in Brookfield mostly come from his relationship with governments and his knowledge of the effectively the subsidy system.
00:10:47.420They invest heavily into areas where the amount of subsidies flowing are massive.
00:10:52.860But now I want to jump over to some other reactions.
00:10:55.780Here we have the one of the conservative MPs speaking out about this.
00:11:43.360I guess we have a trade issue with the U.S., which Carney's not doing a very good job on.
00:11:48.480But what is requiring us to spend $90 billion?
00:11:52.420The economy would improve if we were cutting spending and letting people use their own money themselves.
00:11:57.760In the United States, who pays for most of the world's defense, the U.S., the amount of money that public spending represents, you know, government and any other government-related spending, is 36%.
00:12:12.160In Canada, it's 45%, which is a little bit concerning.
00:12:28.780I thought, again, he was supposed to be the guy who's good at the economy.
00:12:31.820That was like the one thing that Carney was supposed to be good at.
00:12:34.900But here is Mark Carney celebrating his mini win in Nova Scotia.
00:12:39.000And Mark Carney here, our prime minister, says, Nova Scotia is breaking down trade barriers and making it easier to buy Canadian.
00:12:46.920That's how we build one strong Canadian economy.
00:12:49.860And so before I show you the headline, I can already assure you what he said in the header there of his own post has nothing to do with the CTV News headline in the news.
00:12:59.800This is the trade barriers have not even really gone down in Canada at all.
00:13:05.400And this is not what actual trade barriers going down is going to result in.
00:13:13.160But CTV News says buy local momentum leads to business growth in Nova Scotia.
00:13:18.220OK, but are people better off or are they worse off?
00:13:25.940Buy the product that you want to purchase.
00:13:28.600The problem with this is that people are not better off.
00:13:31.960People are voluntarily choosing to purchase more expensive locally made products in opposition to buying anything from the United States, which leads a lot of people to just try and buy as much Canadian as possible and not buy from anywhere that isn't Canada.
00:14:22.340I want lower taxes because we haven't lowered taxes.
00:14:24.860People are just eating the cost of buying local effectively just to thumb their nose at the U.S.
00:14:30.940And Carney, a guy who's supposed to know economics, claims that this is because Nova Scotia is breaking down trade barriers and making it easier to buy Canadian.
00:15:19.420If you just cut DEI spending, anything to do with measuring ESG and stuff like that,
00:15:25.380you would immediately save probably more than $10 billion.
00:15:30.940If you started slashing a lot of entitlement programs that are abusing Canada, putting in place work requirements for certain social security programs for EI and whatnot,
00:15:43.380you would actually be able to save massive amounts of money to the taxpayer.
00:15:47.000But that's not what this liberal government is into because Mark Carney is not actually good on the economy.