Mr. Speaker, when historians study the fiscal decline of nations, they often note that collapse rarely begins with a dramatic event. It begins with habits: habits of indiscipline, habits of euphemism, habits of pretending that borrowing is prosperity, that inflationary spending is strategy and that accounting definitions can be stretched indefinitely without consequence. This Liberal so-called spring economic update is not merely an illustration of Liberal-managed decline. It is not merely a Liberal rebranding exercise. It is a statement of Liberal governing philosophy, and that philosophy is simple: spend now, explain later, redefine terms when necessary and hope Canadians do not notice the bill until it arrives.
Canadians do not need a Ph.D. in economics to notice that these Liberal habits are costing them. They notice the Liberal money-printing inflationary deficits at the grocery store. They notice the Liberal taxes at the gas pump. They notice when their children conclude that home ownership is no longer a Canadian expectation but a lottery ticket. They notice it when this Liberal Prime Minister is the only G20 leader to deliver his economy a recession. They notice when this Liberal Prime Minister lectures them about making more sacrifices while failing to exercise any restraint when adding billions more to the national credit card.
In public economics, there is a concept known as “government failure”. It is the recognition that governments, especially when they are run by Liberals, are imperfect institutions. Similar to markets, they are subject to distorted incentives, information asymmetries, bureaucratic self-preservation and Liberal political opportunism. Liberal Bill C-30 is government failure bound in legislative form.
This Liberal Prime Minister promised discipline. He promised prudence. He promised to spend less and invest more. Instead, in just over a year, this Liberal Prime Minister managed to nearly double the deficit left behind by the last Liberal Prime Minister. Think about that. After a decade of fiscal excess under one Liberal Prime Minister, another Liberal Prime Minister arrived promising sobriety and immediately ordered another round at the bar. That is not renewal. That is relapse. The Liberals call this investment, but Canadians know it as credit card budgeting.
When a household continually puts ordinary expenses on a credit card, not because of emergency, not because of catastrophe, but because of chronic overspending, that household is not building wealth. It is mortgaging its future. The same principle applies to nations, yet the Liberal government behaves as though fiscal arithmetic has been repealed. In academic public finance, debt sustainability matters because interest compounds, fiscal flexibility narrows and eventually governments lose the ability to respond to genuine crises.
The independent fiscal watchdog, the Parliamentary Budget Officer, has once again raised the alarm. The PBO warns that this Liberal abandonment of traditional definitions of capital spending continues to undermine transparency. It is not a trivial accounting disagreement. It goes to the heart of the fiscal integrity of this Liberal government. Capital spending traditionally implies that the creation of productive assets occur, things that generate future economic value, public utility or measurable returns, or things like infrastructure, such as a new road or a new hospital. However, when Liberal accounting definitions become elastic, everything all of a sudden becomes capital. When everything becomes capital, nothing is.
The PBO has explicitly stated that the lack of definitions prevents this Liberal Prime Minister from ensuring that the Liberal government's fiscal anchor remains balanced. In essence, the independent officer charged with scrutinizing public finances cannot determine whether this Liberal government's own numbers mean what the government claims they mean. That should alarm every member of the House.
It is not only the PBO. The International Monetary Fund, the IMF, a global agency that the Liberals love to cite, has now called on Canada to adopt international accounting standards to improve transparency, ensure comparability over time and maintain a clear connection between borrowing and debt. Why? It is because this Liberal government's current fiscal presentation no longer inspires confidence. When both the Parliamentary Budget Officer and the International Monetary Fund are warning that our accounting lacks transparency, this is not a partisan talking point. It becomes a credibility crisis, and credibility matters.
In public choice theory, governments, especially like this Liberal government, are not assumed to act as neutral benevolent maximizers of public welfare. Rather, they respond to incentives. Liberal politicians prefer spending money today while shifting costs tomorrow through higher taxes, higher inflation, higher deficits and higher interest costs. Liberal bureaucracies seek budget maximization at the expense of taxpayers, who are often deprived of any input by their Liberal governments. Liberal insider interest groups seek concentrated benefits, siphoning money from public coffers while dispersing costs across everyday Canadians. This Liberal spring fiscal update reflects every one of those pathologies.
The PBO also warned that repeated spending increases beyond previous projections will “erode the credibility of fiscal plans and weaken confidence in the fiscal framework and raise concerns about long-term [debt] sustainability.” That is the exact credibility crisis that this Liberal Prime Minister finds himself in, because a fiscal anchor that moves whenever politically inconvenient is not an anchor at all. It is driftwood. What is the consequence? It is higher costs, higher debt and higher inflation, but maybe that is the new world order that this Liberal Prime Minister wants Canadians to live in.
Canadians are now paying $59 billion annually in debt interest. The PBO projects that this could rise to $80 billion by the decade's end, which is 13% of federal revenues. That is approximately $1,900 per Canadian every year. It is not for hospitals, roads, defence or housing. It is just to service the interest on yesterday's Liberal excess. Every Canadian family is effectively paying thousands of dollars merely to keep the Liberal debt machine running, and the debt interest now exceeds federal health transfers and the revenues collected from the GST. Canadians pay taxes only to watch that money routed not into services but into servicing the debt for prior Liberal overspending. That is not one of the so-called progressive policies the Liberals love to tout. That is intergenerational extraction.
There is another glaring black hole in this update: infrastructure spending. The Liberals have made commitments, but the Liberal spring economic update provides no year-by-year breakdown by department on infrastructure spending. It provides only Liberal press releases about so-called investments and maybe a top-line dollar commitment. That is Liberal rhetoric for, “This could blow a hole in the nation's finances and we have no way of tracking where the money is going.” In the accounting world, this is called deferred disclosure, and it takes me to my next point.
The Liberal Major Projects Office was heralded with great fanfare, but where are the progress reports on the infrastructure? Where are the timelines? Where are the approvals on the projects? The PBO notes the absence of public reporting. The Liberal government has allocated hundreds of millions of tax dollars for so-called project acceleration, yet it has provided zero clarity. It is no wonder that this office has been described as the “mostly photo ops” office. The only thing we know is that this brand new bureaucracy is staffed with Liberal insiders and executives who are collecting salaries as high as $700,000 a year. This reflects a classic principal-agent problem.
Taxpayers are the principals, while Liberal government institutions and their corporate insiders are the agents. When agents face weak accountability, asymmetric information and vague mandates, they optimize for process and motion, rather than outcomes and results. That is what we see with the Liberal mostly photo ops office. We see Liberal bureaucratic expansion without measurable performance, Liberal administrative theatre without delivery and Liberal insiders getting rich off executive salaries that could reach close to $1 million per year in some cases.
The Liberal housing hell is another prime example of this. After 11 years of failure, Canadians might have hoped for some urgency. Instead, even after allocating $13 billion to the so-called Build Canada Homes, the PBO projects that just 5,200 units will be built annually. In an unprecedented national, made-by-Liberal housing crisis, the PBO explicitly stated that this is “insufficient” to meet the previously targeted pace. If we recall, the Liberal Prime Minister promised 500,000 homes per year during the campaign, but his own brand new housing bureaucracy can build only 1% of his stated target. Housing starts continue to lose momentum and there are no specific metrics, no pace targets and no credible plan. We have the most unaffordable housing market in the G7. The Liberal government offers nothing but bureaucracy in place of home building.
Public economics teaches that regulatory barriers distort supply. When governments create friction through permitting delays, duplicative approvals and antidevelopment frameworks, prices rise. The answer is not endless, unconditional taxpayer subsidies layered atop supply constraints. Those merely inflate demand against an artificially limited supply. The answer is to remove those governmental barriers and let builders build, yet the Liberals persist in governance through announcements, rhetoric and blocking, rather than execution.
We arrive at the newest Liberal fantasy, which is the so-called sovereign wealth fund with no wealth. It is an office to prepare for a future press release to eventually borrow money, at the expense of taxpayers, to fund and siphon into politically charged investments. The Liberals already have the Infrastructure Bank, the growth fund and the defence bank. They have agency after agency, fund after fund and office after office, and the result is that Canada still has the worst investment performance in the G7. This is textbook government failure. If a project has a viable business case, capital markets will invest in it. Private investors will fund productive ventures. If a business case does not exist, taxpayers should not be conscripted into subsidizing political vanity.
Instead, we get what public choice theory would call rent-seeking. Politically connected actors position themselves around state capital allocation, all while consultants, advisers, insiders, transition offices, boards and task forces take out their straws and siphon off their share of taxpayer money. The beneficiaries are concentrated and the costs are diffused. That is how inefficient states grow, and Canadians can see it and feel it.
Canadians deserve better. They deserve an affordable government so that they can have an affordable life, honest accounting, discipline, prosperity and a government that understands the basic truth of economics. A nation cannot borrow and block its way into lasting prosperity.
