WELLINGTON COUNTY – Wellington County’s two Conservative MPs say they can’t support a recently announced federal budget with a ballooned deficit.
Federal finance minister François-Philippe Champagne tabled the “generational” budget in Ottawa on Nov. 4 amid a bleak economic outlook for the country.
The 400-plus-page document contains $141 billion in spending over five years, and with it, a 2025-26 deficit of over $78 billion to pay for measures incentivizing private sector investment and to build infrastructure, including homes.
The government survived two confidence votes last week seeking to amend the budget.
The Conservatives wanted the deficit reined in to $42 billion, and the Bloc Québécois wanted increased spending on social programs and provincial transfers.
A final Nov. 17 vote will determine whether the budget passes, or the government falls and a snap election takes place.
“Canadians definitely do not want to have an election now,” said Wellington-Halton Hills Conservative MP Michael Chong.
Perth-Wellington Conservative MP John Nater said he’s betting the budget will pass. But Chong and Nater told the Advertiser they can’t support it.
Conservative Party Leader Pierre Poilievre said his MPs wouldn’t vote for the budget, nor would Bloc MPs, as per Leader Yves-François Blanchet.
Lone Green Party member, Leader Elizabeth May, also indicated she’s unlikely to vote in favour. It wasn’t clear on Monday how the seven New Democrat Party MPs would vote.
Guelph Liberal MP Dominique O’Rourke told the Advertiser another election would create “instability” and “unnecessary chaos.”
“We believe this is a critical juncture in our history,” O’Rourke said.
The minority Liberal government is two votes shy of the 172 needed in the 343-seat House to pass the budget.
The budget relies heavily on private investment to spur job growth and invigorate a Canadian economy that has slumped or, at best, stagnated in the past two decades.
Exports are down seven per cent year-over-year as of August, manufacturing jobs are down by 30,000 since January, productivity has slowed causing Canada to fall behind other G7 nations, and youth unemployment rose to nearly 15 per cent in September– the highest in 15 years, excluding pandemic years.
Real GDP is expected to grow around just 1% in the next year, under the 2% forecasted in last year’s fall economic statement – and that’s as long as exports stabilize and interest rates don’t discourage domestic demand.
The budget crystal-balls $500 billion in private investment over the next five years to create “a virtuous cycle of investment,” and paints a rosy scenario where Canadians are spending more money – all resulting in a potential $7-billion improvement to the government’s deficit each year.
“Nation-building” capital projects, AI data centres, housing construction, defence industry development, and business tax credits and incentives, the budget claims, will “enable more than $1 trillion in total investments,” creating jobs and growth.
The government aims to bring the deficit down to $56.6 billion come 2029-30 – well above last year’s $36.6 billion deficit. Debt as a percentage of GDP would rise to nearly 42% before lowering to 38.6% in 2029-30.
Savings to the tune of $60 billion over five years – by reducing the cost of government operations and shrinking the public service, among other changes – would offset some spending.
O’Rourke lauded the budget as an answer to Canada’s challenges and an opportunity to fund infrastructure projects and “supercharge” industry.
“It responds to the moment and it positions us for the future,” O’Rourke said following a Nov. 7 Liberal caucus meeting.
“The response to the budget is very positive from business and from the markets and from the broader community.”
The vast majority of what’s in the budget, O’Rourke said, are “immediate measures for resiliency” in response to ongoing trade disputes with the U.S.
A Build Communities Strong Fund earmarks $51 billion for municipal infrastructure starting next year.
“A small municipality, for example in Wellington County, it can take a long time for them to gather up the funds they need for infrastructure projects – this is going to accelerate that,” she said of the budget.
O’Rourke defended the significant deficit proposed, saying Canada has one of the smallest deficit-to-GDP ratios, and the lowest net debt-to-GDP ratio among G7 nations, along with a prime credit rating.
“You can’t say you want more housing, you want to ensure our sovereignty and our economy, and then refuse to make those investments,” she said.
“We’re very confident in our budget, and we are hearing from our community that they’re very supportive as well.
“There is a plan to reduce that deficit over time.”
The budget puts forward two fiscal constraints: balancing money spent operating government with revenue by 2028-29, and maintaining a declining deficit-to-GDP ratio.
Chong said the spending increase would put the country’s finances “on a precarious path.”
The fiscal anchors of past Liberal budgets, Chong said, including keeping deficits below one per cent of GDP and continually declining federal debt-to-GDP ratios, are missing.
Chong said the budget doesn’t live up to the Liberal government’s hype, and fails to address an affordability and housing crisis.
“It’s not a recipe for growth, it’s not a recipe to create jobs, it’s not a recipe to create prosperity. It’s a recipe for more of the same of the last 10 years,” he said.
Nater failed to find benefits in the budget for rural communities.
He wanted to see the feds cost-share municipal development charges to incentivize home building, provide cash for building municipal infrastructure and reduce the cost of living.
Nater said he’s “awfully skeptical” that billions promised through the Build Communities Strong Fund will make it to rural communities.
“The money never comes to rural communities,” Nater said, noting his riding was left out of the Housing Accelerator Fund and the Rapid Housing Initiative.
And instead of changes to regulations, risk management programs and trade markets wanted by farmers, Nater said the government is proposing more money to fund the bureaucracy of the Canadian Food Inspection Agency.
“Some of the things we’re seeing in the budget are spending, but not actual investments,” Nater said.
Unsustainable spending only leads to later cuts, he added, and, “That’s not in the interests of Canadians.”
Prime Minister Mark Carney acknowledged last week there’s risk with a large budget but defended Canada’s balance sheet relative to other advanced economies.
On Monday, Carney said the budget stands up for Canadian interests in response to a “radically different U.S. trade policy.”
