The money pit

The feds are writing a $400 million cheque for the steel boys up in the Sault. The bailout of Algoma comes in the teeth of Trump’s terrible tariff, which threatens the company and its workers. The money is flowing from a $10 billion fund the Carney government set up for just this reason – to save us from the orange menace.

Ten billion. That’s big money. Just last weekend Carey spent $13 billion more on housing, and promised another $23 billion is coming.

And a hundred days ago Carney gave an extra $9 billion to the military, pledging much more is in the pipeline. In fact our Canadian Forces budget is expected to jump from $62 billion now to $150 billion within nine years to meet a NATO commitment.

And then there are the poor, destitute boomers – the ones who stole all the pensions and cheap real estate.

Wrinkly pogey (also called OAS) gives free money to every oldster, which costs $78 billion annually. And every year the bill rises. In little more than two years (fiscal 2028-9) the total is expected to hit $100 billion. (So make sure you pay your taxes, kids!) By 2055 – when the Millennials are collecting it – OAS will cost $234 billion yearly.

Also coming fast is $60 billion for Carney’s ‘nation-building’, screw-you-MAGA, projects intended to lessen dependence on the States and boost the maple economy. The first five are an expansion of the LNG terminal in BC, new nukes for Ontario, two mines (copper and gold) and rebuilding the Montreal Port.

Of course, the provinces are always yapping for more health care transfers from Ottawa. The feds give about $105 billion a year to these other governments, about half of which goes for health. And it’s never enough.

Oh, and don’t forget the debt. The federal pile is now over $1.2 trillion and costs $54 billion a year to carry (we don’t pay any of it back – we just keep adding to it). This bill’s expected to be $80 billion within five years.

Now, see the problem?

Yeah, we’re a little pooched. Not as seriously as the Americans (where the federal debt is $36 trillion and Trump is adding $4 trillion), but enough that our Parliamentary Budget Officer is now buying Tums by the case.

“We’re at a point where, based upon our numbers, things cannot continue as they are, and I think everybody knows that,” Jason Jacques said in a weekend TV interview. He is talking darkly about “the unsustainability of federal finances.”

No wonder. This small nation of forty million souls with one of the highest standards of living on the planet and an insatiable appetite for government services has been jolted by its largest trading partner and sugar daddy. If the current trade agreement with the US is shredded when it comes up for renewal, things will get more intense. So the job of the feds right now is to mitigate risk by investing within our borders, shielding jobs and finding lots of new friends.

That takes money. Either we raise taxes (a lot), we borrow (a lot), or slash spending (by a lot). Over to you, Mark.

Now that he’s got a job again, PP in Parliament has been harassing the prime minister daily about “doubling the deficit” and inferring Carney is just another failed, spendy, irresponsible Liberal. His surrogates on social media have been posting up a storm about a potential $90 billion annual deficit, and inferring Canadians lost their minds when they failed to elect a ‘common sense’ Conservative government.

The budget drops November 4th.

The estimate from the PBO is that the deficit will, in fact, be gross. Not ninety billion, but more like $68 billion. That’s up from the $51 billion in red ink contained in the last Trudeau budget and in excess of what’s-her-name’s last economic statement.

The top marginal rate is 54% in this country. Carney’s already said capital gains taxes are staying put. The budget cop is warning of adding more debt. So does this mean government spending on programs and services has to drop so spending on projects can rise? Will Canadians stomach that? What would a Poilievre government do in this dilemma?

Soon we’ll have some answers. Carney himself says the budget will have two themes: austerity and investment. You know what that means. You know politicians can’t cut. Maybe your accountant should be on speed dial.

Well, he wanted the job.

About the picture: “I agree with applying capital gains to homeowners,” writes Rodney. “Our single family home here in Vernon, BC has gone from a BC Assessment value of $400,000 (new build 2007) to the current $1,100,000 amount. All tax free. Crazy! I’d estimate we have done $50,000 in capital improvements to the place (landscaping & upgrades to kitchen). Here is our Shepherd/Collie cross “Leni”, patiently waiting to go for a top-down late summer cruise.”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2025/09/29/the-money-pit/