00:00:00.000Today on the True Patriot Love Media Network under the Pillar Economy, we're going to examine the five creative chapters that lay out the new initiatives in the 2025 federal budget and let you know our thoughts on if any of them has a shot at increasing our subpar productivity in Canada or increasing our GDP.
00:00:21.860The federal government team worked really hard and did an excellent job writing this budget, given the mandate by the Prime Minister to switch the budget to a new accounting methodology, accrual accounting, similar to the UK.
00:00:34.880But somewhere, it looks like the federal marketing agency took over and this document became more form than substance, with chapter captions like building a stronger Canadian economy, shifting from reliance to resilience, empowering Canadians and protecting Canadian sovereignty and security, creating a more efficient and effective government.
00:00:56.640Sure, the federal marketing team gets an A for creative writing, but in the end, will it make a difference? Well, at this point, it has to. Canada is on the brink. Given our strained relationship with the USA, we cannot afford to put money into projects that do not increase our productivity or have a return via increase in GDP and other better measures.
00:01:19.040Quite frankly, we will crash if this plan does not work out. It will spell catastrophe for the economy if we do not see growth. Our personal assets, including home values, will plummet. Unemployment will go higher than the 2027 projected 9 to 10 percent, and people will start to leave Canada en masse.
00:01:39.600So, we have to pay attention now. Canadians have always been happy to go about their daily lives, not concerned about the federal government and spending, but we are all starting to get a hard lesson. Years of poor growth, lack of productivity have caught up to us, and we are still feeling it.
00:01:58.360At the supermarket, real estate, businesses leaving, we are at that turning point in Canada, and these new and some old federal initiatives have to work or be abandoned forever.
00:02:09.720We are a small country, so we can pivot, but we need to have contingency plans if these proposed plans do not work.
00:02:16.460We are all shareholders of Canada, and we deserve a truthful answer analysis as we enter a very risky path with our country's future through record expenditures and investments.
00:02:28.660So, stay tuned and let us know your thoughts.
00:02:31.440Today, I'm here with Mike Wixson, and we're going to talk about the 2025 budget.
00:02:49.180We started going through the profit and loss statement of the federal government, and today we're going to dig into those, how do I put it, those marketing terms that were in the budget, and I love them.
00:03:00.960I think I've mentioned that before on other shows.
00:03:03.380You know, the guys who write the budget, you know, I think they did a terrific job, and I'm not being sarcastic when I say that.
00:03:10.040They did really have a tough task because we were converting what was a cash accounting system to an accrual accounting system, and there was a lot of rejigging in this budget.
00:03:20.920This is probably one of the more complicated budgets, Mike, that we've had, and, you know, I think they did a terrific job.
00:03:26.300But let me take you through some of the marketing spin that's in this.
00:03:29.160So, they actually had a reconciliation in the budget, and they have five chapters on the programs that they're really focusing on.
00:03:38.340So, when they talk about the investment in Canada and this being, you know, going to restructure the whole investment of the country, they're talking about building a stronger Canadian economy, shifting from reliance to resilience, empowering Canadians, protecting Canadian sovereignty and security, and creating a more efficient and effective government.
00:04:01.480Paul, did they look up the pillars of TPL media by any chance?
00:04:04.900They might have. I think they're following it. They must be watching the show.
00:04:07.840It's so funny, yeah, but it seems like all of the major pillars of Canadian interest are kind of covered by those marketing titles.
00:04:17.660Yeah, they did. It was kind of funny. And I'll call them for the show, not to confuse anyone. Every once in a while, I probably will refer to them as pillars.
00:04:24.660But they're federal government pillars, and there's five of them, right? And I think it's a good idea today for us to go through them and to talk a little, Mike, about how they categorized these expenditures between operating and capital.
00:04:40.880So how is it possible for us to distinguish that in the budget? Is there some method that makes sense for people to understand when they're looking at the budget, look at it this way?
00:04:55.280There is. Actually, in each of the chapters, you know, this 400-plus page budget, there's five chapters that outline the pillars I just mentioned.
00:05:03.660And at the end of each one is a reconciliation of the account, which is good. So it does show you in the end how much of this went to capital and how much went to operating.
00:05:15.260The interesting part, which you're going to, you know, I don't want to ruin the show for everyone, but the interesting part is that you're going to see how little went into operating, how much got capitalized.
00:05:29.400OK. So and, you know, we talked about it on the previous show when we broke down the federal government's profit and loss statement, kind of like you would do your own revenues and expenses for your own life.
00:05:42.540So we broke it down that way to explain to everyone how the $78.3 billion deficit for this year, 2026, and $65 billion deficit for 2027 was broken down.
00:05:56.160And then how on top of that, we have to spend a capital amount and then we have to finance it all.
00:06:16.460I appreciate you put the effort in and your team on this.
00:06:19.500Just to make it a little more simple, this budget is really difficult for Canadians, I think, to understand just because of that major change from cash budget to accrual system.
00:07:49.120I think one of the key things that this government's really got to pay attention to, because if you are a risk taker, and in this case, this is a very risky budget, you know, it's high investment, high spend.
00:08:00.980You have to really monitor what you're doing.
00:08:04.340Like, you have to say, are these projects recouping anything for me, or are they just sunk costs?
00:08:10.520Because if you've accrued them over so many years, they're affecting every single budget that they're not effectively returning on.
00:08:18.540Yeah, if you're spending the money and they're not recouping, you're racking them off, and they're increasing your total deficit line.
00:08:24.140So it's interesting to me, $3 billion is being budgeted, $2.7 allocated as capital expenditure in 2027.
00:08:32.880And these projects are mainly mining, ports, and power, if I may be honest with you.
00:08:40.220Well, so the interesting part is only $71 billion in 2027 is being spent on this.
00:08:49.820So only, so these projects that we announced as major projects, we're really only spending $71 million on, and quite frankly, I don't know, you know, most of them are kind of either coming to completion, have been started, or, and there's, up until 2030, there's, I think I have it in my notes here, they're spending another $244 million.
00:09:18.300So, so I don't understand, $71 million against 10 projects that are massive, this does not build a port, this does not open up a security corridor, this does not create the LNG phase two, what is $71 million actually probably going toward?
00:09:37.520I think it's a lot of consulting, it's a lot of project development, a lot of maybe soft costs going into this number, but this definitely isn't a full charge on these projects, right?
00:09:49.820Some of these projects, like I said, have been completed in the past, I think they're just being thrown on the list.
00:09:54.060But, you know, you know, the one I always laugh about is the high speed rail between Ontario and Quebec, you know, it always gets on the list, it never is going to happen.
00:10:04.420The other one that, the other thing that occurred to me is there's a lot of mining, there's a lot of, how to put this, there's a lot of remote project development here outside of the major city cores.
00:10:17.740And it leads me to wonder, okay, how are we going to employ people in that, in those areas?
00:10:23.340Does this really go to the bottom line for employment and, and, you know, then income tax revenues, if they're so far removed from, you know, the major centers?
00:10:36.440Again, I just think a lot of them are, they're good, they're good projects that occurred a while ago.
00:10:42.720I think you throw them on the list, you throw a bunch of money, and you can talk about them in the budget, but I, honestly, I don't think they're.
00:10:57.220I think, you know, the, again, the, the marketing company that put the budget together did an excellent job on getting us attached to the different branding for the initial initiative.
00:13:24.780So, you know, if you go through, and the other one that pops to mind, Mike, when you look at this, is the scientific research and experimental development tax incentives.
00:14:37.940So, if you're going to give companies the shred credits, you should align that with your international talent.
00:14:44.200So, to sort of move your industrial production ahead, right?
00:14:48.520So, in other words, use these credits alongside getting the right talent to create earth-shattering or globally desired accessible product.
00:17:17.980There's a bunch of money sitting in that capital budget, which includes a bunch of things.
00:17:23.160And they're saying in that capital budget mostly is the AI expenditure of 1x3, because the only money that could hit the operating budget is about $11 million plus some that's mixed into other small line items.
00:17:34.480But for the most part, that's what they're doing.
00:17:37.900And with airports, they're doing that too.
00:20:24.640And so now these projects that the government's actually putting on their books that are indigenous or First Nations projects, do they then own the projects?
00:20:33.220We'll come back to it, too, because...
00:20:34.700I guess they do, because they're capitalizing them.
00:22:42.660So what's left in that $65 billion deficit, you know, revenues, less operating expenses, is only a small portion of this amount of the $115 billion.
00:23:22.960Which is truthfully, and this is where, you know, it's odd that in some of these discussions that have taken place since the budget was dropped,
00:23:31.100the opposition should be spending all their time on these capital spends.
00:23:35.460You know, they can go back and they can spend time on the operating budgets.
00:23:39.240They have to at some point because it's just getting larger.
00:24:56.400It's a huge amount of money on that, right?
00:24:58.360So, you know, we're talking about retraining, retooling companies, diversifying economies, like all the words we're using in this, you know, this is kind of a concept right now.
00:25:12.320So this is like concept money that we've set aside.
00:25:15.660Also, not for nothing, but on our team, Shara pointed out just before the show, if we don't have people here to employ that are, what training programs,
00:25:25.800if we don't have skilled and qualified people to come into these programs, even to retrain them and stuff like that, where is this money actually going?
00:25:33.740So it's almost like the cart before the horse on this one.
00:25:36.840Well, and it's, you know, it is a little bit, but, you know, this is where we're challenged at Lillian Canada right now.
00:25:44.620And we can't make the mistake of not doing the right thing to make this work.
00:25:49.860And basically, we have to figure out our key industries that we want to be involved in.
00:25:55.100So what is going to make us the most money, increase our GDP, then we have to find people, and then we have to train them properly to do it.
00:26:04.480So, you know, with Jimmy Lang, you know, I did this show, and it's about building submarines.
00:26:22.460Well, but the one thing I think that they weren't paying attention to, or I think we missed a little bit from the conversation, was how do we take Canadians and train them to be in that industry?
00:26:33.240So as we're going and we're going to spend billions of dollars on defense and submarines and aircraft, you know, how do we shift into that industry?
00:26:44.240You know, use our ports to build submarines and things like that, but, you know, it's, and again, I use China, just I know the economy is different, the governmental system, I get all that.
00:26:56.480But one of the things the Chinese do really well is they have a definite strategic vision of how they create key industries within their country.
00:27:06.720And they do things with, with that in mind every time.
00:27:11.700So if they build a cruise leisure ship, you know, for like, like we would in Carnival Cruise Line to go on a cruise, they also make it functional.
00:27:21.400So at the end of the day, they can take military vehicles and load them up and ship them to another port.
00:28:28.580And we're going to only capitalize, uh, 500 million of it.
00:28:31.800So we're, the money is already flowing, the retraining, everything, the programs are already in play.
00:28:37.100Um, which, which, you know, again, it's monitoring that success to make sure you're getting the people trained in the right industries to recreate those industries.
00:28:45.300So, you know, uh, I think it becomes, it, it, and this is something, I don't know if, uh, government's really focused on at the end of this, it's going to be hard for them to say, well, I don't have any welders.
00:28:58.260I don't have any, you spend a lot of money because we're talking, you know, if we look at this, quite frankly, um, we're, we're talking, uh, crepes.
00:29:09.740It's, it's, it's, it's, it's roughly around, uh, 50 billion dollars up until 20 or sorry.
00:29:18.460No, not that much, $16 billion up until, uh, 2030 and we're going to capitalize 8 billion of it.
00:29:28.260Um, so that means 8 billion operating expenses and 8 billion.
00:29:31.920So 8 billion in training is a lot of money.
00:29:36.160And what are we recouping on that up to 30?
00:29:54.320So you, you, if you spend $16 billion, you better make sure you get the right people in the right industries coming out of it.
00:30:00.340This is maybe where this kind of budget makes sense because you're amortizing over a long period of time, which major industries do when they're opening a plant or they're creating a new facility.
00:30:21.600Well, and that's, you know, so if you look at it, it consists of 182 million in 2027, uh, that's going into agricultural, agriculture, fisheries, seafood and forestry.
00:30:34.360And then we have this big lump, which is, uh, protecting workers and transforming Canadian strategic industry.
00:30:41.500So that's kind of the, what I call the, the bubble, you know, that we don't really know what we're doing.
00:30:46.660We don't understand what that really means.
00:30:49.700And we also protecting workers and transforming, uh, we have more money from a financing perspective, another 1.2 billion.
00:30:57.460So financing means that you're going to borrow from the government up to $1.2 billion as industries to retool, re-strategize and, and retrain.
00:31:06.900So it's a big, it, it, it really is, it is a big, and that, that's a scary thing, right?
00:31:12.900And, um, you know, we also have, which before we leave this one, I just wanted to comment on, we have a growing Canada's trade with the world.
00:31:22.560So we also are spending in 2027, $690 million on a strategic new trade strategy, which is again, a concept.
00:31:35.640It's, I was going to say, it sounds very conceptual.
00:31:37.900I mean, it needs a detailed plan and that's a lot of money to spend in this year without a plan, unless there's already one in play that we don't know about, or it's already been capitalized previously.
00:32:20.540We, you know, we're, we're landlocked, you know, by water.
00:32:23.600So now it's trying to find a way to get, to get that happen.
00:32:26.520And, and that's a strategy that has to rapidly be developed.
00:32:31.960It's got to be deployed and it's got to be, uh, figured out with all the side, uh, you know, and, and main deals that are happening with the other countries.
00:32:42.040As he's traveling around all those trips he's doing, he's trying to figure out what they need and quite frankly, how to get it there.
00:32:48.480Well, it was interesting because, uh, I had a moment with a formal, a former liberal MP last week and, uh, I said, well, here's Carney flying all over the world doing photo ops.
00:32:59.880And, you know, I got corrected pretty quickly by her.
00:33:03.080She said, actually, what he's doing is he's taking businesses and trying to activate trade deals that we have that nobody's using trade arrangements with countries where we don't have trade at the moment.
00:33:15.040And that was his mission out there at that moment.
00:33:18.820I saw it a different way, to be honest with you.
00:33:20.980I saw him flying around first class in the best plane on earth, uh, next to the presidents.
00:33:25.940But it does make sense that you've got to get out there.
00:33:29.580And if we're going to do business in other parts of the world that are not the U S we actually have to take our businesses to those countries.
00:33:37.240We have to host these arrangements to make it happen.
00:34:41.040And I think that quite frankly, gives people a little bit of confidence or a little more confidence that things are happening and investment is starting to take place.
00:35:45.220Now that 10.2 billion is made up of a big nut.
00:35:48.900Now you might think, okay, that's a lot of homes.
00:35:51.920It's it, it is, but quite frankly, a big portion of that 10.2 billion is just a cash payment to Ontarians, which we're going to get to in a minute.
00:36:10.060And, and basically it also is an expender expenditure on protecting Canadian culture values and identity.
00:36:17.280So, so this one's just not on home building.
00:36:20.140It actually has a payment to us as in general and then going forward.
00:36:24.580So, you know, we all heard about this, you know, we want to, uh, build more homes, partner with industries and indigenous communities to build affordable housing.
00:36:35.240Um, we wanted to figure out a way to harness innovative housing strategies.
00:36:39.100So this is, uh, you know, I think, uh, the prime minister met with modular home builders a couple of times.
00:36:45.780We've seen a couple of photo ops, uh, haven't gone that well to tell you the truth, but no.
00:36:51.060And this actually feels a lot to me, like, uh, incentives that are made to get people buying new homes as, as opposed to buying a resold home.
00:37:01.220There's not a lot of incentive, I think, built into this as we, as we go forward, we're going to see.
00:37:05.960But what I do see is, uh, great benefit to developers building brand new homes, uh, and marketing.
00:37:14.280So this is going to give people a cut, a break on buying a developer new home for the first time.
00:37:49.200Well that, you know, it's a whole other Pandora's box, but, uh, you know, we did a, uh, show on it the other day.
00:37:55.860It's going to be coming on to the network, but you know, you have 30,000 condos that are vacant or struggling right now.
00:38:02.840You have, uh, low home starts, you have, uh, you know, tough time.
00:38:07.940People are selling a home is near to impossible right now, an existing home.
00:38:12.440Um, so if you, on top of that, start to, you know, go out and build modular homes like crazy throughout, you're going to add another pressure onto all those markets.
00:38:49.240But if you're not in that, if you're the guy selling your house at that wrong moment, and this seems like a dip that could take a while to come back, uh, back from, I mean, that is if they actually deliver on this.
00:39:01.400It's just, you know, I was watching a stock market thing the other day.
00:39:04.840And, you know, if you see a 20 to 30% hit in home prices, it'll, it'll take at a 2% growth rate on home, uh, prices going back up.
00:39:14.960It'll basically take you almost 30 or 40 years to get back to where you were.
00:39:19.080So most people will never see the daylight of that, that dip.
00:39:22.780So, you know, it's not like the, it, you know, the, I think we're kind of coming, we're all sort of getting, uh, wising up a little realizing the real estate booms of old are probably they're gone.
00:39:34.960So unless there's something, unless, unless this budget, here's the thing, if this budget hits and productivity just skyrockets and we become a nation that's booming again, we're going to see housing prices go up again.
00:39:49.240If we don't, we're not going to see housing prices go up.
00:39:52.040Honestly, this budget does seem aimed at that, uh, if I was to be truthful.
00:39:57.100So supercharging home building across the country, $1.8 billion.
00:40:00.340The remainder of that money comes out in the form of removing the GST for the first time home buyers, uh, which is something that's in effect right now.
00:40:08.920But, um, this extends itself even further with new development, new, yes, new homes.
00:40:32.280Is there some point at which we will provide our indigenous people, our first nations people, clean water?
00:40:40.620How many years have you seen us putting money toward cleaning the water?
00:40:44.980We have the most fresh water of any place on earth, but for some reason we have to spend a billion dollars in every budget to try and get clean water to our indigenous people.
00:40:59.120Well, I'm hoping, so here's, you know, this has been, you know, you know, my theory on, uh, dealing with, uh, you know, problem solving, I'm hoping that this brain trust that we're going to, uh, immigrate, we're going to go out and recruit, bring to Canada.
00:41:14.320Uh, there's someone there who actually can tackle this because at some point we should be able to, like, you know, we have rockets going up, uh, all the time.
00:41:22.240We have Elon Musk has a bulletproof car that, you know, can go weigh 7,000 pounds and goes faster than a Porsche 911, but we can't figure out a way to filtrate water.
00:41:33.100We figured out how to get a pipeline across their lands, but not get them clean water.