True Patriot Love - November 11, 2026


Carney’s 2026 Budget： The $62B Deficit & The Revenue Gamble ｜ Part 2⧸4

[Best of TPL] Which Supplements Actually Work—and Which Are Hype？ ft. Dr. Mark Tarnopolsky

Episode Stats


Length

26 minutes

Words per minute

178.3

Word count

4,654

Sentence count

58


Transcript

Transcript generated with Whisper (turbo).
00:00:00.000 stay with us for the budget shows there's lots to talk about even in places where the budget
00:00:10.360 seems a little light more on that as we talk revenues today in the budget with paul micucci
00:00:16.420 thanks paul hey mike how are you doing good so you know your initial message to me as we spoke
00:00:22.080 on the weekend was this isn't going to be all that involved a show and there's good reason for that
00:00:27.620 Well, we did a lot of shows last year on the budget.
00:00:31.060 You remember we did multiple shows, and one of the shows we did, an in-depth show, was on revenue.
00:00:35.900 And it was interesting because there was a lot more detail to talk about, quite frankly.
00:00:40.820 There was a lot more going on, the movement, the shifting in revenues, and what was happening in the different accounting of revenues.
00:00:47.520 Yeah, it was a totally different budget style.
00:00:50.060 Exactly.
00:00:50.720 So that kind of prompted a more in-depth analysis.
00:00:53.700 So we're comparing revenues to last year.
00:00:56.300 so we took a look at the projections of the government uh this you know the budget just
00:01:01.420 dropped this week they're out in the market cultivating the budget our prime minister is
00:01:06.140 doing a world tour to all kinds of countries skipping the he's getting criticized of the
00:01:11.900 skipping the climate conference so but he's not that worried quite frankly because the budget's
00:01:17.340 going to pass they have a majority so you know there's not a lot to really do on from his
00:01:22.380 perspective and i get that so you know he says i'm going to go travel and try to get more deals into
00:01:27.740 canada well hallelujah on the deals because when you look at the revenue which we're going to talk
00:01:32.620 about today so we're going to talk about the revenue of the federal government and last year
00:01:37.180 when we talked about it mike we started with the fact that from a let's talk it from a summary
00:01:44.940 perspective the federal government makes so if we had to say revenue wise like a normal company
00:01:51.260 makes 526 billion dollars so that's their annual revenue total revenue which is made up of income
00:01:58.060 tax revenue excise and duty revenue employment insurance premiums and other revenue so those
00:02:05.420 are the kind of the four line items the big line items that make up the revenue line now they're
00:02:09.980 broken down in a lot of subsets right for example you know other revenues is composed of crown
00:02:15.500 corporations but you know it's interesting when you break it down you see where the big numbers lie
00:02:20.300 so that's where i really want to get into it with you today and and talk about kind of how um canada
00:02:27.180 doesn't have a uh well it has an expense problem but it now is starting to have a revenue problem
00:02:33.980 so you know years ago people would say canada doesn't have a revenue problem it has a spending
00:02:39.740 problem but now it appears we flattened out on revenues which i talked about last year
00:02:45.260 and it's just coming to fruition as we get into this budget now for those of you you know who
00:02:50.620 aren't accountants don't worry we're not going to dive into it uh and we're not going to use a lot
00:02:55.260 of complicated uh accounting language we're going to stay a very high level on this one
00:03:01.180 but i really want you to understand the numbers and and basically how the revenues of the
00:03:06.140 government lay out um and why they're trending like they're trending so the first one we're
00:03:11.500 going to get into and we're going to throw up on the screen is income tax revenue so pretty easy
00:03:16.940 for most people that's personal corporate non-resident income tax yeah you got it mike and
00:03:23.420 of course the biggest one is personal so and that's the one the government basically they
00:03:29.100 last year was 247 billion dollars so if you remember 526 billion is the total revenue of
00:03:36.060 the government 247.7 billion is personal income tax right okay right so that's going up 11 billion
00:03:45.020 dollars 258 billion i guess will be the new yeah 258 billion and that basically um there's a bunch
00:03:53.740 of reasons for that quite frankly but the big one is the big one is uh oil right the big one is and
00:04:00.860 that that that seems to be the prevalent analysis and then they're expecting so the government is
00:04:07.900 expecting that the labor market will stay strong and that investment income will increase so as
00:04:15.180 as the world becomes more unstable more people will put their money into canada more people will
00:04:21.820 canadians will keep their money here right investment incomes will go up they'll pay more
00:04:26.300 personal tax on investment incomes more people will work because as they roll out a lot of this
00:04:32.160 is hinged on the super productivity or the sorry the mega productivity deduction which comes off
00:04:38.680 the super cycle uh in their budget right which we talked about in the last show so they assume that
00:04:44.400 as these deductions happen suddenly there's going to be a massive increase in productivity which
00:04:50.940 mean more people working which will mean more income tax so right okay you know the big gain
00:04:55.900 so the big gain that almost 10 million in uh income tax revenue comes primarily from personal
00:05:03.980 income tax so you know as you can see corporate tax is is uh very very uh stable and low it it
00:05:12.620 goes down actually actually reduces by a billion five and it does that a lot in the projection in
00:05:18.380 the years ahead well part of that is this mega productivity's uh deduction so there's a lot of
00:05:25.420 tax breaks whether they're shed credits whether they're mega productivity right that allow
00:05:29.740 companies to write off things or expense them in year one not wait and uh capitalize them then
00:05:36.620 advertise them over time so there's a lot of tax breaks to get companies to come into canada and
00:05:42.060 you know they they did it you know we commended them in the budget uh brief um they've got a lot
00:05:48.540 of tax breaks for corporations to get here we got to get our productivity going again right so part
00:05:54.940 of this taking a huge cut in corporate tax rates is to kind of get come to get companies to either
00:06:00.780 come back or get company companies in canada to spend more to get more competitive worldwide so
00:06:07.020 there is a huge push and when you look at our corporate tax rate uh compared to other companies
00:06:12.780 jim and i did the analysis in the last show it's it's less than half of the u.s a very quick favor
00:06:19.500 before we continue a large percentage of you who watch or listen to tpl media every week aren't
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00:06:47.020 so thank you now back to the show i that's you and i kind of touched on that just a few minutes
00:06:53.020 ago and it's it's funny how this comes into focus when you when you see this budget oh okay we are
00:06:59.100 per capita under a lot of hot water by comparison even to the U.S., which we'd like to.
00:07:04.340 Can I ask you a question, Paul?
00:07:05.780 Sure.
00:07:06.080 The productivity mega-deduction, that's going to decrease 1.5% to $102 billion, our corporate
00:07:19.960 income taxes, as we point out.
00:07:22.020 At what point do we start to see the positive effects of this productivity mega-deduction?
00:07:28.100 well we do see i hate the names we come up with yeah we we do start to see a little of
00:07:34.580 the rebounding of that uh further along so for example in the unemployment insurance premium
00:07:41.300 revenues so basically the they expect that the labor growth will get strong and as more people
00:07:47.940 are working there'll be more money going into ei even if that's not coming out of corporate taxes
00:07:53.860 it'll come out of ei but it'll come back in revenues because as an employer you'll have to
00:07:58.140 pay a more to the government exactly that's right so it starts to offset right so there's there's
00:08:03.400 these offsetting revenues i'd say costs so for example um you look at uh the mega um the skills
00:08:17.040 development let's take a look at this one for a minute the skills development program is about
00:08:21.140 3.9 billion over five years okay so they're going to retrain they're going to put people back into
00:08:26.980 the market as people fill those almost what they project to be a million jobs that we need to fill
00:08:34.900 in different trades primarily construction the big part of it more people will be working and
00:08:39.940 they'll get more monies coming in from from income tax from personal income tax and more money coming
00:08:46.580 in from from ei premiums the corporate deductions as it were but that's the real play here you know
00:08:54.900 for from a revenue perspective that's what they're they're spending a lot of money and they're giving
00:08:59.300 a lot of tax breaks to try to get people working again so they can get personal income tax but you
00:09:06.420 can see where as you pointed mike we have a declining uh corporate tax and so corporate tax
00:09:12.100 is going to stay flat uh going forward actually yeah even even when it when it rebounds uh let's
00:09:19.940 say 2030 2031 it's still at 100 billion we're at 102 billion now so we're not even going to be at
00:09:27.740 that 102 billion in five years right when whereas in personal tax we're going to be at 309 billion
00:09:35.160 from $247 billion in last year.
00:09:39.440 So you can see the offset.
00:09:41.140 They expect to see a personal tax,
00:09:43.820 but that's because more people will be working.
00:09:46.200 They'll be having higher salaries.
00:09:48.020 They'll be in the labor force, whereas they're not now.
00:09:52.280 You look at, you know, one of the things to sort of keep in mind
00:09:55.320 is when you look at some of the benefits that people get right now,
00:10:00.680 they get a food benefit program, right?
00:10:03.200 so when you take a look at the canada groceries essential benefit top-up there's almost uh well
00:10:10.080 over what they're saying in the budget there's over 12 million people getting monies annually
00:10:16.080 from that program right so look at that so now what they're thinking is that they'll have more
00:10:21.440 people coming off of that program getting higher paid jobs paying starting to pay income down okay
00:10:26.560 so they're seeing the transition you know when they talk about they talk a lot about homelessness
00:10:30.800 which we're going to spend on the next show which is on expenses when they talk about homelessness
00:10:35.920 they're even in here projecting okay you know so many people homeless they're going to actually
00:10:41.200 clean them up they're going to get them into housing the big push is to get homeless people
00:10:45.520 into housing now and then that is a big that's a big trend right now get them into homes first
00:10:50.320 yeah and once they get into homes then they'll right size they'll get into the marketplace then
00:10:55.360 they'll start to pay income tax so although you know that's the big part of this budget and what
00:11:00.400 their goal is for this budget so that's that explains to me because the good uh gst revenues
00:11:05.840 are projected to decline by 0.6 to 51 billion as you point out right in 2027 26 27 reflecting the
00:11:13.920 impact of the canada groceries essentials as you mentioned yeah uh over the remainder of the
00:11:18.160 forecast period gst revenues are expected to increase by an average of six percent per year
00:11:24.080 now that that to me seems like a hefty jump uh what are your thoughts uh you know and mike it's
00:11:32.640 interesting it's a pretty fast cycle like the funny thing is the super cycle which is basically
00:11:38.160 starting off coming up with an idea getting investment for an idea and then basically
00:11:43.840 building the idea and then getting a return on the idea and then the cycle starts again that's
00:11:49.360 kind of the whole super cycle idea of what they're trying to do they're trying to instigate
00:11:53.600 the growth now but they're only at the planning right now for most of the projects in canada that
00:11:59.760 they've put money into it's really at the planning phase so they have they're still trying to find
00:12:04.240 investment they're still trying to get it built um gst you know they're subsidizing people from
00:12:10.560 food benefits so uh where quite frankly a lot of those being tax-free they don't have gst so quite
00:12:17.440 but they think that's going to rebound quickly so i think they're probably six percent per year
00:12:22.880 no no i think they're very aggressive on that line item so you know and a lot of these quite frankly
00:12:29.040 you know uh shout out to the guys that do this budgeting very frankly what they do is they give
00:12:34.880 the government a set of scenarios so aggressive not and then they basically do go down and they
00:12:41.440 okay make this one aggressive so they're just right they're executing what they're told to
00:12:45.440 execute by line item if someone says i want to ramp up the gst they ramp up the gst and six
00:12:51.680 percent might have been in this case on the high end so well it's pretty funny but six percent's
00:12:55.920 like uh a lot of money well it is in that budget you think about it that this is revenues quite
00:13:01.760 frankly so this is money that have been you know people have received they've remitted it quite
00:13:07.120 frankly by you know it's a sale so they've actually increased their sales by you know whatever
00:13:13.360 you know in this case six percent six percent of uh the difference the delta right yeah that's
00:13:19.920 billions of dollars it's billions of dollars year over year anyway that's that's just one that caught
00:13:25.080 my unskilled eye well you know hopping over we'll go the next slide which is the excise and duty
00:13:30.980 revenues which you hit on mike you know the one that jumped out at me a little bit was the tariffs
00:13:35.860 and the counter tariffs so part of you know what we're seeing is quite frankly a big part of our
00:13:42.000 increase or in this case we we only saw a two billion dollar increase in the excise and duty
00:13:49.360 revenues but part of that was custom import duties that came from counter tariffs yeah and then the
00:13:55.760 other one that actually jumped out which i thought was really interesting is they basically had a
00:14:00.960 decrease uh oh sorry this is a decrease of two billion sorry you got it right mike yeah this is
00:14:06.000 a decrease of two billion the other one i got they basically uh said the fuel excise tax had come
00:14:12.880 into play so it had been removed right yeah so they were giving up 2.7 billion dollars yeah but
00:14:18.560 that's going to change next year yeah it will rebound back so we're talking about just so we're
00:14:25.760 clear with everyone listening in today we're talking about next year so 26 27 right so we'll
00:14:32.320 see a decrease in excise tax and duty revenues um but once the the fuel excise tax comes back
00:14:40.560 comes back on the year after it starts to go the other way again so basically what we're being told
00:14:45.520 right now is correct me if i'm wrong 27 28 we're going back to regular price gas which could mean
00:14:52.480 it's going up what's going to go up 10 10 cents a liter because that's the i think it's the offset
00:14:58.080 so now with with what's going on in iran and everything else going on that's not going away
00:15:02.960 quick so yeah i think they've so we could be at over two dollars a liter in gas which i don't know
00:15:08.080 is accounted for and affecting the economy here uh oh no probably probably in one of their
00:15:14.960 projections better be moderate or or you know low they probably did look at the fact that the
00:15:20.960 increase in uh gas tax would uh dampen down their productivity levels but it's interesting to me
00:15:27.920 that we're being told hey good news we're going to get another 7.7 or 13 billion dollars on we're
00:15:34.460 raising the gas again yes well that's not helping anybody thanks sorry just put it out there no no
00:15:39.900 well you know that's that's the good news this year but bad news next year yeah yeah so you know
00:15:46.480 all told like i mentioned uh you know and corrected it we're we're down about 2.2 billion
00:15:52.380 this upcoming year on excise and duty revenues so wow yeah so now jumping over to the next side
00:16:01.780 which is other revenue mike you know it's interesting because this one um i thought
00:16:07.440 for sure this is this is interesting i thought for sure that we would see a more substantial
00:16:14.880 increase in this one i don't know why but i really did think this would you know because
00:16:19.360 as we got the productivity we'd see more money coming in uh from our resources to our uh
00:16:26.480 crown corporations but crown corporations was flat so the 13 billion dollars that we did last
00:16:33.120 year we're going to basically make this year so right you know all the complaints about you know
00:16:38.240 the post office losing a billion dollars but every crown corporation from a federal perspective
00:16:43.200 is relatively flat so it's it's basically an even number so they didn't project anything but you
00:16:48.720 mentioned on other programs there was a huge increase so we went basically four billion up
00:16:55.920 on other programs right yeah yeah and you know i thought that was really interesting right so i
00:17:01.520 So I don't know what the other programs include, except that one of the things is that we're
00:17:06.020 going to be collecting more from people who owe and the excise taxes that are owed to
00:17:12.740 us.
00:17:12.940 So basically, yes, carrying on collections.
00:17:16.940 Yeah, part of this is the actually people who are overdue on their taxes.
00:17:20.500 So part of this is collections of their taxes.
00:17:23.340 Another part of that is, quite frankly, the monies that are going to flow in from oil
00:17:27.920 revenues and everything.
00:17:28.980 so they're really banking on this is a big number um you know i was a little shocked how big they're
00:17:34.860 banking on it i i must admit mike i thought i didn't think it would be quite this big to tell
00:17:40.320 you the truth and it makes some real jumps i mean like uh it's the one line item here
00:17:46.380 other programs it just seems to almost by comparison be charitable well this is also
00:17:53.660 offshore you know and i was going to throw that in because i forgot offshore oil revenues right
00:17:58.400 So this isn't Alberta anymore.
00:18:00.500 This is like St. John's.
00:18:02.160 Right.
00:18:02.500 This is down in Newfoundland.
00:18:04.040 Federal interest.
00:18:05.900 Exactly.
00:18:06.520 So they're expecting a big push from that.
00:18:09.360 And quite frankly, maybe they'll get it.
00:18:11.500 But they still have a lot of issues to go through before they get there.
00:18:15.660 Net foreign exchange revenues and return on investments.
00:18:19.440 Yes.
00:18:20.920 What are we invested in out there that's bringing in $6 billion?
00:18:25.420 Basically, they're going to ride higher interest rates.
00:18:27.680 oh yeah so that's all they're going to ride higher interest rates i don't think
00:18:31.320 you know foreign exchange and dollar currency exchanges they may trade better on the currency
00:18:36.040 market so they might do better trading because they you know they keep floats of different
00:18:39.980 currencies as a government so they'll make some money on their outstanding currency exchanges
00:18:44.920 but they they believe that the monies they do short-term invest they'll make more money on
00:18:49.760 because the rates are you know we have tiff macklin and the bank of canada and the rest of the feds
00:18:55.180 around the world they're wherever they have their money right right now they're a large portion of
00:19:00.200 our pension funds and places are in the u.s right so quite frankly as they see higher interest rates
00:19:05.520 and they go to safer havens with investments they project which i think is a good is a probably a
00:19:11.020 good assumption to make at this point hey before we go any further please hit the subscribe button
00:19:16.180 right now if you want the raw debates the full uncut conversations you won't see here head
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00:19:26.960 what happens behind the paywall. All right, back to the show. It's also a good safeguard, to be
00:19:31.680 honest with you, understanding that now. So really, Paul, overall, the budget, it's so funny how little
00:19:40.500 space in the budget that revenues take and how much space we put into the expenditures.
00:19:47.440 overall you're feeling on this budget well it wasn't a surprise from what i said last year so i
00:19:55.300 was i was curious because when we did the budget brief i didn't really look i looked at the numbers
00:20:01.260 quickly and i went uh interesting you know i knew the deficits were you know consistently 60 plus
00:20:06.920 billion a year and then i thought to myself well they obviously didn't get any new revenue sources
00:20:12.320 or a few revenue sources.
00:20:14.520 And like we talked about, Mike,
00:20:15.960 the balance of it is coming from an increase
00:20:19.840 in personal income tax.
00:20:22.720 Well, yeah, this is the,
00:20:23.620 my note on this show was Ottawa expects to take in
00:20:27.240 about $14 billion more this year.
00:20:29.220 It expects expenses to rise by about $51 billion this year.
00:20:34.140 That's before the pension accounting you mentioned.
00:20:38.260 Then next year, almost every dollar of new revenue
00:20:40.920 is matched by another dollar in expenses.
00:20:44.700 So even if the forecast come through on this budget,
00:20:49.480 the deficit still sits there at $62 billion
00:20:51.900 with really no service to it.
00:20:54.460 Well, and Jim said it on our last show,
00:20:56.880 what we did on the budget, Mike,
00:20:58.600 and it was very interesting.
00:21:00.020 He hit on it right away.
00:21:01.760 What if that assumption doesn't happen?
00:21:03.820 What if the labor market goes soft
00:21:06.000 and the investment market goes soft?
00:21:08.120 we've been like you know collecting from canadians doesn't go so smooth yeah yeah you know like no
00:21:13.980 but we've you know we we rode the wave as as the u.s terrorists came the uk stepped up and they've
00:21:19.180 done quite a bit in investing in canada there's been quite a bit of you know money transferring
00:21:23.920 over and the u.s coming or the uk coming in and actually putting money into our financial services
00:21:30.480 system so there's a lot been a bunch of money flow that's basically showing trade between the
00:21:37.080 two countries very positive on our side from a surplus perspective but quite frankly there have
00:21:42.440 some challenges too so i think from an investment income perspective i think we have to kind of look
00:21:47.240 at that what you know what canadians are going to do with their monies and how much money they're
00:21:52.680 going to make off other monies they have in the country or whether they'll find other safe havens
00:21:56.840 who knows it's in the clouds yeah so that's kind of speculative and then quite frankly to project
00:22:02.440 that we're going to have a very strong labor market you almost have to based on this budget
00:22:08.280 because by taking the step to do the mega productivity deductions and some of the tax
00:22:13.480 relief items you really are forgoing a lot of revenue hoping that you'll catch and get money
00:22:20.280 from people who are working right i get that but that is a real that is that's a heavy assumption
00:22:25.800 paul that business gets its i mean well and in a short period of time yeah timelines don't seem to
00:22:31.720 operate that way yeah because just so we're clear you know income tax revenue makes up 9.6 billion
00:22:38.120 pers you know income tax revenue being corporate and personal but personal being the balance of
00:22:43.560 it makes up 9.6 billion dollars of the 13.8 increase in revenue for the government so it's
00:22:51.000 the lion's share like it is it is without that happening that theory falls flat where do we land
00:22:59.240 uh we have an increase in our deficit again and then we have to go out and borrow uh we have to
00:23:04.120 borrow in a market that has higher interest rates we have to you know there's a lot of uh challenges
00:23:09.800 if we have to now will we will we survive yes we will you know the government keeps telling us that
00:23:15.320 our debt to gdp is manageable um when you take out you know we did this the last show when you take
00:23:22.840 out pension funds you know cpp qcp when you take all those things out of that equation
00:23:29.320 we're not that great we dropped to fifth in the g7 out of all countries uh debt to equity or debt
00:23:35.880 to uh gdp so we we follow the fifth fifth last right fifth from last on that list we're number
00:23:44.840 five right so yeah we're not number one we're not number two we're number five um and i think
00:23:50.360 there's like uh france and germany behind us something like that or no sorry france and
00:23:56.040 germany are ahead of us so and we're even behind to them yes well this is uh paul very interesting
00:24:03.480 we'll see uh and once again i'll recommend people stay uh linked to these budget shows because
00:24:09.800 today for example very interesting my takeaway is we have a very
00:24:16.280 aggressive storybook budget to follow here yeah well you know fingers crossed that the tax
00:24:25.020 deductions and the tax structures that they're putting in place do work trigger the the work
00:24:30.040 and they do happen but you if you remember we didn't go and actually create by changing your
00:24:36.140 tax system that's one thing you can do and they're doing it to try to get productivity
00:24:41.780 that moving but quite frankly then it has to catch and get people to invest and get all those things
00:24:47.860 in that super cycle to happen there's a lot has to happen to get that to work and we're looking
00:24:51.780 at super cycles that happen in under two years it's very budget it's a very aggressive assumption
00:24:57.460 that it's going to catch that fast given the way the last year has gone so you know listen i wish
00:25:04.180 i hope it happens quite frankly i've said that on other shows i think it's a very aggressive
00:25:08.900 assumption but you know not much different than last year when i said listen we don't have unless
00:25:15.860 we look at participating in some of the resource projects that we have and getting our royalty
00:25:23.220 payments and equity payments or dividends from those projects to start throwing money
00:25:28.500 to canadians and wealth funds and things like that there's there's not much else we can do
00:25:35.060 pretty soon our international lenders are going to demand that we do that because they want us to
00:25:39.860 have some form of equity in the things we're investing in i would assume anyway we're about
00:25:44.820 to do which is mike it's interesting um you know and i think it'll be a great debate we're about to
00:25:48.500 do an uh an oil uh oil and gas show coming up uh with a very interesting guest and quite frankly
00:25:56.340 it'll be a great conversation to figure out looking at our financial statements and our
00:26:01.380 revenue position where we stand. Oh, Morgan's a good lineup for that one. He is. Thanks, Paul.