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Canada's 2021 Budget | An Economist's Perspective

Updated: Jun 14, 2021

“Oh, those stupid fools in government!” we often hear men say.

“Stupid, arrogant, invertebrate jellies armed with nothing more than smooth-talking and slick handshakes are stealing my paycheque and driving this country into the ground.” is the sentiment of many regarding the Members of Parliament.

Famous was Pierre Elliot Trudeau’s reign and his appetite for federal deficits. His son is carrying on the family legacy. For their entire tenure, this Liberal Government has been one financial disaster after another. It’s no surprise. We knew Canada was going to get economically dummied when our current Prime Minister confidently stated, “…budgets balance themselves.”*

During this round in the ring of “How long before Canada’s economy crashes?” we got what we expected and then some. The 2021 Canadian Federal Budget promises “sunny ways” even though this government has plunged us into the darkest depression in many years. $30 billion allocated for subsidizing childcare, $17.6 billion divvied for green energy reconstruction, and billions more in every area of life.** With this budget, Canada’s debt has surpassed one trillion dollars—a number so vast that no human mind, even the greatest and most advanced of human minds, can comprehend its immensity.

The scariest thing of all is that our government, contrary to the common belief, isn’t stupid. This budget isn’t an honest mistake. It’s not even hopelessly ignorant. This Parliament is one of the shrewdest in a long time. They are a crafty, brilliant, cackle expertly manipulating the art of economics to achieve their goals.

Therein lies the problem with our assumption “this government is financially brain-dead.” We naturally believe the government should balance the books and strengthen our economy through sound fiscal and monetary policy because it serves our individual interests. But what if, as has been made clear, the government’s goals are not our own? What if our rulers intend to make people totally dependent on political aid, thereby securing their power and permitting them to legislate whatever they want? This budget offers insight as to how they’re going to do just that.

1. Inflation

Proud of her work on the Federal Budget, Liberal Minister Chrystia Freeland said, “Opportunity is coming. Growth is coming. Jobs are coming…”*

No, they aren’t. Those things aren’t coming. On the contrary, an ominous inflation is thundering on the horizon, and its economic hurricane is nearly here.

All governments, but this Liberal government in particular, have voracious appetites to spend money; the 2021 budget puts it on full display. Of course, if the government is hungry to spend, the food must be provided. The funds must come from somewhere.

We might’ve expected that the budget to increase taxes, thus satisfying the new spending, but not so. It looks like it’s going to be an election year, and taxes don’t win elections. So, the government is heading to the factory, the Central Bank of Canada, to get their fix of cash. And what a fix it is!

I want to show you a graph. Below is the growth rate of M2 (Cash, cheques, and money that’s easily converted) in the Canadian economy over a five-year period (America follows the same trend).**

Or, to simplify, below is M0 (just cash) creation over a 25 year period.

Something looks very wrong. The creation of money has grown exponentially. If Milton Friedman is correct, which history proves he is, in asserting that “Inflation is always and everywhere a monetary phenomenon...”, then we’re in for it. And that seems to be the point.

The Bank of Canada and the Feds say inflation is hovering between .5-2%,”*` but it’s a smokescreen. It’s a lie to keep the dollar “strong” and interest rates low. Is it possible that we can see the kind of money growth we are now, which by definition devalues it, and yet hold inflation constant? It’s not. The price of lumber has almost quadrupled from the start of 2020; average housing prices have increased 30% in the last year alone. Other goods like groceries are following suit.**`

The evil of inflation is that things like savings, loans, and income taxes aren’t indexed. The man who needed $1 to buy a loaf of bread last year now needs $2, but his savings remained constant at $100. They did not double, only the price of bread in response to the increase of money. Government pays off a $1 bond at a sale because that $1 is now only worth .50c. The government prospers, and the citizen suffers.

“Well, if inflation is created in the printing presses, shouldn’t they just slow down the creation of money? Or rather, shouldn’t the government stop spending so much so the central bank can stop printing and bring inflation under control?” They should, but if they stopped spending on social services, the Liberal government might not be re-elected.

2. Spending

Canada’s deficit as a percentage of GDP, pictured below, is already astonishing.*

Indeed, the Federal Government has promised tremendous spending over the following years on anything and everything that will procure votes. Though the economy has suffered seriously, primarily due to bureaucratic restriction, now the government tells us they are going to fix the problem by spending on and subsidizing social services, freeing the seized gears of the market, and moving them once again.

But one does not need to have a degree in economics to understand that welfare is never free. Taxpayers pay with money and inflation, and recipients pay with their dignity. It is a terrible trap. They are many of us who are barely scraping by and are in real need of assistance. Most of that is because of government and not in spite of them. It takes a strong and sober man to resist the easy descent into welfare in the best of times. How much more impossible is it for people to resist the political sirens of a free lunch in perilous times?

3. Dependence

So if the welfare state will bankrupt us, and if the coming inflation will bring us to our knees, why not change the budget? Why not reset our economic heading 180 degrees and sail the other way? Is it perhaps, as Lewis called it, that Ottawa would make us “Willing Slaves of the Welfare State?”

Almost everything in this budget is designed to make us totally dependent on the government. The spending and inflation drag us into poverty, the promised welfare provides the only way of subsisting during that time of poverty, and the government is permitted near-absolute control over our lives and all that we do.

Canada’s government is transforming into something it’s not supposed to be; a parent. We are being reshaped and remade into an image of the state, an image we do not want to follow. But it makes sense why Prime Minister Trudeau and his Liberal gang would do this. No child, after all—not a young one still dependent on his parents—questions his father’s authority. He provides food, clothes, shelter, and everything else the child needs to live. How could the boy revolt against his father’s leadership and rule? Where would he be without his parents?

The purpose of this budget is not to save the country, no not at all. The real purpose of this budget is to ensure the Liberal Government (the modern Conservative Party is no better) never loses power again.

Unless we change, there will be a real economic crash, one the House of Commons engineered, and we will be so desperate to survive and feed our families that we will be forced to depend on our new father, the government. We will beg for their help. It’s a brilliant sleight of hand. They are first a secret slaver, then public saviour. A silent enemy, then a vocal friend. Poison then antidote. The more this government spends on us, the more involved they are in our lives, the stronger their grasp of control until we can never say, “please, leave me alone.”


*Watch here

** Every subsequent quote regarding the substance of the budget is found here


*From here

** Every graph in this article was cited from "" and searching the relevant information here, here, and here, respectively.

*` From here

**` Statistics found here and here


*See "**" above

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