Community editorial board: Just whose nation is the budget building? – “Who’s Shaping Our Budget? Insights from Canada’s Community Editorial Board”

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The narrow passage of Prime Minister Mark Carney’s first budget gave Canadians a clear view of what to expect from this government.

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The budget was touted as generational ad nauseam, and heavily promoted so-called nation building projects, but it ultimately offers little to help ordinary Canadians who are increasingly struggling with the cost of living.

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The budget lavishes new funds on the Canadian military. Carney has proposed increasing defence spending to 3.5 per cent of the gross domestic product (GDP) with an additional 1.5 per cent of GDP on defence-related expenditures. This would amount to over $150 billion in annual spending and mean defence spending would reach levels not seen since the Second World War.

With such a massive investment, we could easily ensure that every Canadian has decent housing by investing in a major expansion of social housing.

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Outside of vague references to threats and a more uncertain world, it is not really clear why Canada needs such a staggering increase in defence spending. It seems based on little more than reaching an arbitrary percentage rather than any sort of defined need.

Carney’s approach of prioritizing large infrastructure projects seems more likely to line the pockets of foreign billionaires.

The proposed Ksi Lsims pipeline and liquefied natural gas (LNG) facility in northern B.C. is emblematic of this rushed approach that will provide few benefits to Canadians. The project will be owned and operated by subsidiaries of Western LNG, a Houston, Texas-based energy company, while the export terminal will be fabricated in South Korea. The project requires the publicly funded construction of a $6-billion transmission line that will use hydroelectric power in the energy-intensive process of liquefying natural gas.

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The project lacks consent of four of the six Indigenous communities it would run through, and it remains unclear just what involvement or ownership stake the Nisg̱a’a Lisims First Nation would have the in project.

The purpose of LNG export terminals is for producers to access higher prices on the international market. Increasing LNG exports exposes Canadian consumers to greater price fluctuations as they must compete against international buyers. Fortis B.C. — a subsidiary of the same company whose holdings include Cornwall Electric — substantially increased natural gas prices for B.C. consumers in January, in part to cover pipeline expenses.

If Canadians only get low royalties and a minuscule number of jobs, while paying higher prices for gas and seeing virtually all profits flow out of the country, just what exactly is the point of providing generous government support to these projects?

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The project is emblematic of a wider, but generally unaddressed problem with the Canadian energy sector: most of the profits flow straight out of the country.

A recent report from Canadians for Tax Fairness details the incredible growth in profits in the oil and gas sector. From 2021-23, the oil and gas industry took in $135.2 billion in profits, while paying wages of only $43 billion. This ratio of profits to wages is approximately nine times higher than average for non-financial industries in Canada.

This represents a tripling of profits in just 10 years. One would hope that this level of profitability would at least lead to more jobs, but the opposite has occurred with nearly 30,000 fewer jobs in the oilpatch today as there were in 2014.

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The report notes that the four largest companies in the oil sands are 60 per cent American owned, with Canadian ownership amounting to just 27 per cent. It estimates that from 2021-24, nearly $60 billion in profits flowed out of the country to American shareholders and owners.

Canada’s conservative premiers have not simply been advocating on behalf of the energy industry, they have in fact gone far beyond any demands of the sector, with Alberta Premier Danielle Smith proposing pipelines in every cardinal direction despite the complete absence of any private-sector proponent.

Carney has tended to be more reserved when it comes to oil pipelines, largely because no one in the private sector wants to build them, but we see a very similar willingness to support foreign-owned natural gas projects that also provide few jobs and see most of the profits leave the country.

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The central problem is that nation-building for Carney appears to refer to little beyond increased defence spending and large, privately owned pieces of infrastructure. It will continue the now decades long upwards transfer of wealth in Canada, and we will continue to see record corporate profits while many workers struggle to meet their basic needs.

The budget cuts corporate tax rates yet again, despite Canadian corporations taking home nearly $600 billion a year in profits from 2022-24. Canadian corporate tax rates have halved since the 1980s, yet productive investment has not budged over this period. Instead, dividends paid to shareholders skyrocketed.

With over 35 years of evidence, we can conclude the exact same thing will happen this time.

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The budget was a particular disappointment in terms of housing.

While the Liberals promised a significant change during the election with the creation of a new agency under Build Canada Homes, the proposed new funding is simply on a scale that is far too small to address the massive unmet need for affordable housing in Canada. Coupled with a distinct lack of provincial investment, upper levels of government continue to chronically underspend on housing, with municipalities in Ontario now spending more on housing than both upper levels of government combined.

We can very safely expect steady growth in the number of people living on the streets across Canada as only one level of government treats the issue with the urgency it deserves.

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The new budget only promises $6.5 billion in new spending on housing by 2030. Much like the government led by Justin Trudeau, there are also no specific goals beyond some very modest, short-term targets for deeply affordable housing on federal lands.

There’s no goal to eliminate homelessness or reduce the number of Canadians living in core housing need. If there are no goals or metrics, then how is success even measured? As the population of homeless people in Canada continues to grow, this country needs a firm target and adequate funding to finance the large-scale construction of non-profit housing.

If we actually wanted to build a better country, we would start by prioritizing the needs of ordinary Canadians.

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This involves confronting the idea that pouring public subsidies and brushing aside regulatory processes for foreign-owned, extractive industries is the form of economic development we should pursue. Instead, goals like ensuring every Canadian has access to decent housing and adequate food should be prioritized and we should dispel the myth that such investments are somehow bad for the economy.

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As though sending tens of billions of dollars out of the country every year is somehow beneficial for Canadians.

Carney’s approach to nation-building is little more than trickle-down economics with a generous side of corporate welfare wrapped in a Canadian flag.

If we are serious about economic self-determination in Canada, then we should have the courage to demand public ownership of our natural resources so the proceeds don’t end up building mansions in Houston.

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