Mike Colledge: What Carney's budget must do
There is an appetite for bold action — but there are also major regional and demographic divides in this country that the PM cannot ignore.
By: Mike Colledge
Prime Minister Mark Carney’s budget, set to be released tomorrow, may well be the right budget for the country and the times. But the success of the budget will not be measured based on the reaction of the market or the pundits. Or even the polls. It will be measured over time at the grocery store, or when Canadians look at their bank balance, or real estate listings for their next (or first) house.
Bluntly, success will be measured by how younger Canadians, in particular, feel about their own prospects. And time is not on the prime minister’s side.
Throughout the last election, Carney kept his focus on sovereignty. It was a wise decision at the time. Alarming talk of annexing Canada by U.S. president Donald Trump had Canadians rallying around the defence of our sovereignty. Carney’s campaign leaned into that. “Elbows Up,” Mike Myers, and the anti-Donald Trump messaging was designed to clearly and quickly tap into how threatened and scared Canadians felt last spring. With annexation on the table, there was no time or room for economic arguments.
Seven months later, Trump is still no friend of Canada, but with the president more focused on Venezuelan drug shipments, the Middle East, and Russia-Ukraine, all the pre-budget signs have pointed to a document that won’t be focused on existential issues of Canadian survival and identify, but more pragmatic issues of Canadian economic strength and resilience. Combined with his recent remarks to young Canadians, the prime minister seems concerned with growing doubt among all kinds of Canadians — split by age and region — about what this country really works anymore. Whether it’s a place that “they” — however that’s defined — can succeed, or even thrive.
Carney, in fact, has no choice to ask these questions — because the public started long ago. The seeds for today’s “Does Canada work for me?” conversations were cast over a decade ago when economic sentiment started to decline. This has huge spillover effects onto every element of Canada’s public life. Canadians’ response to U.S. annexation threats and tariffs, recent shifts in consumer behaviour (such as “Buy Canada”), their views on national policies, and the country’s growing generational and regional divisions are all exacerbated by a growing gap between the views of those who feel economically secure and can see light at the end of the tunnel, and those for whom the Canadian dream seems more of a pipe(line) dream than not.
Today, six in 10 Canadians agree Canada is going into a recession, and while Canadians may feel more or less united in their opposition to becoming the 51st state, they do not stand together from an economic perspective. Boomers and higher-income Canadians appear to be largely sheltered from the economic disruption. Gen Z Canadians are five times more likely to be concerned about unemployment when compared to Baby Boomers.
It’s not just that young people face higher unemployment — although they do. It’s that they experience the issue in a completely different way. In the eighties and nineties, older people cared about unemployment because it was a measure of the country’s overall economic success. In 2010, as the economy recovered but jobs lagged (especially for younger Canadians), older Canadians were twice as likely as younger Canadians to say that they were concerned about unemployment.
That’s changed. Today, unemployment is a measure of personal concern. As a result, unemployment is not a significant source of alarm for Boomers. Their concerns are the stock market, interest rates, and their own personally experienced cost of living issues.
The federal budget may be groundbreaking, or bank-breaking, or possibly both. But there is room for Carney to spend on major initiatives, so long as he can sell them as necessary to address a public yearning — Canada has paradoxically emerged as a country that wants to move forward to reclaim a past they remember. They want a Canada that is affordable, where economic progress feels possible and whose future was optimistic. Carney echoed this sentiment at his recent University of Ottawa speech. “We used to build things in this country; we can build again.”
There is an appetite for that kind of talk, and for a budget that is suited to that. Today, Canadians support efforts to invest in national projects, diversify our trade, and increase spending on national defence, all in the name of strengthening Canada’s economy. They even support running deficits and increasing Canada’s debt load — at least for now.
Time will tell if the support holds or if it fades under the weight of regional conflicts, Not-In-My-Backyard-ism and the patience of Canadians — whose support is tempered not by their political affiliation but by the size of their bank account.
In the coming weeks, a flood of commentary and economic analysis will dissect this budget. None of it will matter. The success of its individual initiatives won’t matter. The fate of this government will be decided by a single metric: the patience of the Canadian people. And that is a resource in critically short supply.
Mike Colledge is the Sustainability and Executive Insights Lead for Ipsos Canada.
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This country resembles the former Yugoslavia. It is Balkanized, as alluded to by Mr. Colledge, and needs a Tito to postpone the inevitable. The regional interests are mutually exclusive and the best that can be hoped for is a budget that prioritizes development based upon rational principles, not ideology.
Dr. Carney is an ideologue who can't hold a candle to Tito. He will appease the LPC voting base at the expense of the Western provinces. The existential threat to the post-nation state comes from within.
The Canadian people and their government seem to be going in different directions. Canadians may yearn for long ago feelings of belonging, optimism and security, their government is still stuck in the green dream, more interested in their ideology than making the country prosperous and ready to respond the challenges ahead. I'm pretty sure Carney is a smart man but what I've seen from him so far is that he is completely ill equipped and unable to respond to today's challenges because he can't relate to what ails Canada. Carney talks a good game but has no plan. Just like his predecessor, he seems more interested in the perks of the job rather than the job itself. Being PM means being a public servant to ALL Canadians, that is not what I see from this Carney liberal government. I hope he proves me wrong in time but what I've seen so far doesn't leave me very optimistic.