Western Standard - HANNAFORD： A year later, Carney’s Canada is still sinking

00:00:00.000 good evening western standard viewers i'm nigel hanaford and this is a special edition of the

00:00:22.880 hanaford show something i want to talk about one of the sins common to people like me whose job it

00:00:29.200 is to read the nation's tea leaves and pass judgment upon what governments do is that we

00:00:35.180 fail to give due allowance for circumstances beyond the actor's control. So while as a

00:00:42.440 conservative it is easy for me to find fault with the Prime Minister's performance in his first year,

00:00:48.580 fairness dictates that nobody could have predicted the tariff onslaught from the U.S. that has rippled

00:00:55.380 through the Eastern Canadian economy, or the military action against Iran that has elevated

00:01:00.980 gasoline prices nationwide. If Mr. Pollyer had won the last election, he would have faced the

00:01:07.440 same demands to do something, anything. It is the somethings that Mr. Carney has done

00:01:15.160 that are the problem. After almost 10 years of Mr. Carney's predecessor, Justin Trudeau,

00:01:21.820 who did his best to make fiscal ignorance sound like a quality to aspire to,

00:01:27.400 it is understandable that enough Canadians thought putting a banker in charge was the right thing to do.

00:01:32.860 A central banker at that, in fact, twice a central banker.

00:01:36.220 How could we go wrong?

00:01:38.660 Yet, Canada's economy is limping into 2026 with the same old liberal hallmarks,

00:01:47.080 massive borrowing, sluggish growth, and a debt burden that's growing faster than our paychecks.

00:01:54.140 A year ago, we were promised recovery and resilience. Instead, we've got that flat per

00:01:59.960 capita incomes, rising unemployment, and interest payments on federal debt that rival the cost of

00:02:06.140 major programs. This isn't thriving. It's muddling through on borrowed time and borrowed money.

00:02:12.460 We've also got a gaslighting galore problem.

00:02:15.480 Listen to this.

00:02:16.580 This is actually transcribed from a press release from the Prime Minister's office

00:02:21.520 as he opened the major projects office last July.

00:02:26.120 He said there would be ports, railways, energy corridors,

00:02:30.100 critical mineral developments, clean energy initiatives.

00:02:32.680 Our industries would be diversified.

00:02:35.560 There would be new markets, high-paying careers.

00:02:38.320 heavens we would all be rich and our economy better connected whatever that means obviously

00:02:44.240 none of that has happened and while in the continued interests of fairness we admit

00:02:50.160 that it might take more than a year to get all this done nothing has even been announced as

00:02:58.160 starting except some projects that were already 99 approved before the fanfare that launched the

00:03:05.120 the major projects office. Ladies and gentlemen, what we have seen instead is our peripatetic

00:03:11.560 prime minister visiting, on average, a country every two weeks, I gather, for a year, announce

00:03:18.040 a memorandum of understanding that commits nobody to anything, and hurry home to make

00:03:22.820 a spending announcement backed by more debt. Look, this is what a memorandum of understanding

00:03:29.920 is like. It's like you meet another couple on a cruise, have a fabulous time for four days,

00:03:37.060 and part declaring that, if you're ever in Houston, look us up. It's simultaneously sincere,

00:03:45.400 a possibility, and highly unlikely. So, let's look at the numbers after a year of Mr. Carney's

00:03:55.800 travels. Canada's real GDP growth clocked in at a meager 1.7% for calendar year 2025. That's the

00:04:05.840 weakest since the pandemic year of 2020, during a time when the unexpert Mr. Trudeau was in charge.

00:04:14.920 Then there was a contraction of 0.2% in the fourth quarter. Per capita gross domestic product

00:04:21.900 has been essentially stagnant in multiple quarters,

00:04:26.860 dragged down by weak exports and tepid business investment.

00:04:30.900 Official forecasts for the current year hover around 1% to 1.2%,

00:04:36.140 well below what economists hoped for even a year ago.

00:04:41.080 Basically, folks, if you don't have 2% GDP growth per year,

00:04:45.180 you don't have much going on.

00:04:47.920 Folks, we're not building wealth.

00:04:50.000 We're barely treading water.

00:04:51.900 Meanwhile, they say inflation has cooled to an average of about 2.1% in 2025, with the consumer price index at roughly 1.8% year-over-year by early 2026.

00:05:07.820 That is supposed to make you feel better.

00:05:10.800 And that's progress of a sort from the post-pandemic spike.

00:05:17.220 Well, there's a problem with the way they put these numbers together.

00:05:20.880 the baskets these people use to come up with these reassuring numbers, including things you

00:05:28.040 don't buy very often and the prices of which therefore hardly move. Look, my wife and I still

00:05:34.040 use a color TV that we bought in 2010 for $1,000, brand new, and the equivalent thing can be had

00:05:40.840 today from Amazon Prime. Take your pick in the $900 to $1,000 range. That is kind of how I

00:05:50.800 would like inflation to be for everything. On the other hand, food prices and everyday costs,

00:05:57.560 it's a different story, isn't it? That grocery bag you filled for $65 last year is likely to cost you

00:06:03.960 closer to $75 this year, so you're paying a lot more than 2% inflation growth. That bites hard

00:06:14.040 for families here in Calgary and across Alberta and across all of Canada.

00:06:20.520 The Bank of Canada has managed to bring it near target, yet the gains feel hollow when

00:06:25.520 wages aren't keeping pace and growth remains anemic.

00:06:30.280 And that's where the labour market comes in and also tells us a tough story.

00:06:34.220 Are you looking for work?

00:06:36.860 Last week's jobless report must have hit you like an atom bomb.

00:06:40.620 rose to 6.7 percent in february up from 6.5 percent the month before with employment dropping

00:06:47.900 by 84 000 jobs that's bad enough but then there are some people who don't even look anymore and

00:06:55.180 that's where the labor force participation number comes in and that has slipped to 65

00:07:02.220 percent in the past year and so that what that means that 35 of the people out there are not

00:07:11.100 jobless they're not even looking for work so what we're really saying is that even among the people

00:07:16.140 who want to work the employment rate is going down in other words what we're seeing is softer

00:07:21.340 engagement overall fewer people working fewer people looking for work even as headline job

00:07:28.060 numbers fluctuate. No recovery here, my friends. Then there's government borrowing. A year ago,

00:07:34.940 the federal government accumulated deficit was $1.2 trillion, equivalent to 41% of GDP. Add to

00:07:43.020 that the last year's budgetary deficit of $78 billion, one of the largest non-pandemic shortfalls

00:07:49.820 ever recorded. Public debt charges are forecast to reach $53 billion this year and climb further.

00:07:58.060 Main estimates hit $487 billion for 2025-26, with deficits adding hundreds of billions over the

00:08:07.500 medium term. This government boasts about the lowest net debt to GDP in the G7 on some measures,

00:08:15.900 but that's cold comfort when interest costs are exploding and borrowing keeps piling up without

00:08:22.420 delivering robust private sector momentum i had the privilege of working with somebody who knew

00:08:29.060 better i'm going to compare this to the harper years of 2006 to 2015. stephen harper also came

00:08:37.540 to office with a towering liberal mess in 2006 and instead of the tariff war with mr trump he

00:08:44.340 He ran head-on into the Great Recession of 2007-2008.

00:08:50.060 There's always going to be something.

00:08:52.480 But policy matters, and Harper had a different way of doing things.

00:08:56.280 That is, he was forced against his will to run deficits

00:08:59.940 during the Great Recession, 2008-2009.

00:09:04.720 You know, the global crisis with gritted teeth and tears

00:09:08.220 in our conservative eyes.

00:09:09.700 My department had to write the speeches.

00:09:11.760 But then he slashed them.

00:09:14.340 slash through spending restraint and public sector discipline. By 2014, the books were near

00:09:22.200 balance with a projected surplus for 2015-16. Federal net debt to GDP fell to around 31%

00:09:32.360 by 2014, one of the G7's lowest, after rising temporarily in the recession. I'll say it again,

00:09:39.640 policy matters. Program spending growth was tightly controlled after 2010. Tax cuts like

00:09:47.080 the GST stimulated the economy, and the focus was on private sector recovery and job creation

00:09:54.900 in high-wage sectors. It was not on the atmosphere and carbon dioxide and seeing how we can get rid

00:10:05.600 of the oil sands that produced so much of the wealth that made these outstanding numbers

00:10:12.400 acceptable unemployment had trended down over time so it can be done and the contrast is stark harper

00:10:19.520 didn't have president trump's tariff policies to contend with for or for president trump himself

00:10:25.280 he'd have been stevie but for sure by the end of the first white house visit but stephen harper

00:10:29.760 navigated the worst global downturn since the depression paid down debt precisely where possible

00:10:36.240 possible and returned to surplus through deliberate restraint say it again policy matters mr carney

00:10:43.200 has a different policy and his approach today is the opposite of stephen harper's persistent large

00:10:49.200 deficits for social programs infrastructure and extended pandemic style spending even in normal

00:10:55.920 times. The result, well, you see it, you're ballooning debt, interest that crowds out

00:11:03.020 everything else, weak per capita growth, and an economy reliant on public borrowing rather than

00:11:10.080 private investment. You can't borrow your way to prosperity. Actually, I think I might have

00:11:17.400 written that once. Endless red ink mortgages future generations for today's political priorities. 0.60

00:11:23.180 It crowds out productive investment, keeps taxes higher than necessary, and leaves less room for

00:11:29.100 real emergencies. Harper proved you can balance the books without killing growth, through discipline,

00:11:35.640 not denial. The current path proves the opposite. Spend like there's no tomorrow until, guess what,

00:11:44.100 tomorrow arrives and brings with it the bill. Ladies and gentlemen, it's a time for a reset.

00:11:51.120 spending restraint, balanced budget discipline, and pro-growth reforms, cutting red tape,

00:11:58.480 incentivizing investment, and letting markets work. These are the only way forward. Harper

00:12:07.220 knew this. Resource, wealth, and fiscal responsibility built our strength, not endless

00:12:14.160 government expansion. Mr. Carney's policies have put us on a debt train. It's not jumping

00:12:20.900 the tracks yet but i'm worried about whether it's actually going to go over the side of the bridge

00:12:26.020 in the not too distant future we're not doing well and what we're doing we're doing on credit

00:12:32.660 and the interest ladies and gentlemen is coming due

00:12:36.420 For the Western Standard, I'm Nigel Hannaford.

Western Standard - March 21, 2026

HANNAFORD： A year later, Carney’s Canada is still sinking

Episode Stats

Summary

Transcript