Confessions of a Spendaholic
In which the Liberal government stays in power, gets the youth vote, and spends Canada into the ground
Remember the Shopaholic book series of the early 2000’s? Author Sophie Kinsella made bank on the overspending adventures of her plucky heroine, financial journalist Becky Bloomwood, over the course of nine novels and a movie, Confessions of a Shopaholic (ironically released in 2009 at the height of the financial crisis).
Spending made Becky feel good and forget all her problems. She could justify every shoe, dress and handbag that caught her eye. Problem was, she couldn’t afford any of it, racked up a pile of credit card debt and liquidated her belongings to pay it back.
The 2024 version of this tale, Spendaholic, is currently playing on small screens near you. It stars erstwhile financial journalist Chrystia Freeland as the Finance Minister of the Liberal government, merrily buying new budget items to the tune of $53 billion over five years. To whit:
$19 billion on housing, rent support, disability benefits, childcare, school lunches and youth mental health
$10.7-billion on defence
$9.1-billion in new spending for Indigenous communities
$7.6-billion for economic growth measures
$6.4-billion for community health and safety
That’s a lot of new shoes. And it’s not clear that any of them will actually fix what ails this country: a housing shortage caused by high interest rates that discouraged construction and reduced home purchasing power, coupled with too-high immigration levels that increased housing demand, topped up with several years of high inflation and supply chain failures that spiked the cost of living.
But all that spending makes it sound like the government a) cares b) has a plan and c) is doing something. So the thinking is, open the wallet, and let’s go.
Here’s what the government is really doing. Apart from staving off the wrath of the US and NATO by boosting defence spending (but not even close to making up for previous underfunding), it has two objectives: keep the Liberals in power by implementing the NDP’s agenda, and get back the youth vote from the Conservatives.
The youth vote
There are 15 million voters in Canada aged 18 to 45, and most of them seem mad as hell. Conservative leader Pierre Poilievre knows this and has been stoking their anger ever since he was elected. Stuck in your parents’ basement? It’s Justin Trudeau’s fault. Can’t buy groceries? Trudeau again? Can’t get a date? Ditto.
The result: for the first time, the Conservatives are leading among young voters. Recent polling found that among 18 to 29-year-olds, the Tories clock in at 36 per cent support, the NDP at 27 per cent and the Liberals at just 19 per cent. It gets worse among voters aged 30-44, with the Conservatives enjoying 43 per cent support to the Liberals’ 23 per cent.
The budget measures are designed to correct a generational inequity that has young people failing to launch. According to Becky, er, Freeland,
"We are doing this because a fair chance to build a good, middle class life — to do as well as your parents, and grandparents, or better — has always been the promise of Canada."
The bill
How will the government pay for this? Like Becky, on its credit card! Or rather, on the taxpayer’s. Over $30 billion will be borrowed at today’s high interest rates, and $21.9-billion will be funded through increases to capital gains taxes and excise taxes on tobacco and vaping products. Boomers and sinners, come on down.
But there’s one problem: “soaking the rich” costs everyone. Wealthy Canadians will find ways to avoid paying high taxes on their capital gains. Entrepreneurs will do the same, in part by not investing in Canada. So the government will collect less money than it anticipates and crush job creation in the process – both of which hurt young people in the long run, by racking up higher deficits and creating fewer jobs.
And unlike Becky, the government can’t sell its assets to balance the books. Instead, the debt will just continue to grow. For the first time, debt payments will consume more than health care transfers. And things are going to get worse: debt payments are predicted to rise from $54 billion today to $64 billion in 2028 - money which will come from, you guessed it, taxpayers, including young taxpayers.
The prediction
Over the next few years, this movie will morph from comedy to tragedy to horror film. Of course by then, the actors, including Trudeau and Freeland, will likely have gone on to different roles, leaving today’s opposition - and the next generation - holding the bag. Rating: 0 stars.
You are too kind! They are a Trust Fund government run by a Trust Fund PM & no understanding of where most Canadians live work or get taxed! They are “virtuous” in their motives - just ask them - and know what’s best for us! I think they are damn the torpedoes on the national treasury & if it doesn’t work for them, they hand the Opposition a steaming stinking mess of a country & when the CPC is just about done, it will be election time again and Central Canada will be ready for “Sunny ways” again! They deserve a caucus that would fit in a minibus!
This current movie running, “The Budget Will Balance Itself XIII” needs to be rated Mature. Long gone are the days when the Liberals can hoodwink low wattage Canadians with imaginary fiscal guard rails and growing a bloated bureaucracy that spend their days plotting new government programs to interfere in Provincial jurisdictions.
Canadians need to take ownership of this mess now. It’s time to coalesce around a new political vision that rejects empty platitudes and unsustainable spending. A mature country needs to grow up and remind the political class who works for whom.