Sunday Scrum | Who does the budget help most? What does the blue-nami mean for Canada?

More independent, more sovereign, masters of our destiny. It focuses on growth, on people, and that sovereignty so we can live our lives as we wish. The Liberals should have called their budget mastered by debt. Carney's costly credit card budget is going to increase food, gas, and housing costs even more. Masters of Our Destiny is the title of the federal budget, as you heard there from the Prime Minister. The opposition saying it will only make life more expensive for Canadians with billions in new spending, some affordability relief and an ambitious plan to tackle homelessness. Can the government deliver on those promises and at what cost? Let's bring in our Sunday Scrum. Nick Taylor-Vasey is the Ottawa Bureau Chief for Politico. Emily Nicolas, a columnist with Le Devoir. She's in Banff today, lucky her. And Rob Shaw is a political correspondent at Czech News. He's host of the Daily Political Capital podcast, and he's in Victoria. Good to see everyone. Thank you for being here. Thank you for being here. I think I'm going to start with affordability, given that we were just talking to Christina just a moment ago, who's got four kids and struggling to make ends meet. I wonder, Nick, whether you think the budget did enough on that front or struck the right balance between all the other things that the government's trying to do here. Well, coming out of the pandemic, the federal government has set really high expectations. They have said, we will be there for you as long as it takes, however it takes. That was the Trudeau era message for the country, and Mark Carney's government has continued it. And so there is billions of dollars in this budget for affordability measures, including this grocery and essential benefit, which is the topped up GST rebate. But we've talked before on this show, you and I, about The levers government has to make change in people's lives, and when they suspended the excise tax on gas, everybody across the country felt that a few bucks at a time. But that also didn't reach only the people who needed the help, that reached everybody. And now the rebate and some of the other tax credits and tax incentives that are in this budget will reach people's bank accounts, so they will be able to get to it at tax time. But they need help now, like your previous guest really could use the help today. And so the government's in a bit of a bind with the limited levers it has at its disposal. Yeah, and I should say, you know, to be fair to the government, this is in this budget. There are other pieces that you could say count towards cost of living, the national food program, the cost of daycare that has been reduced, all those kinds of things. But in this moment where this seems to be the central issue for most people, Emily, do you think that the government did enough here to be able to say that they're on top of the issue? Yes and no, it really depends on the tools that were used in the sense that there's a lot of it, you know, François-Philippe Champagne, even before the budget, he was talking about how they're going to help small businesses by trying to make, you know, tax credits that already are there more available and just basically toying with fiscality. Just to give you an example, they're doing now the same with artists and just trying to give people who create tax credits in terms of just up to a certain amount. The thing is, a lot of artists, and you look at the statistics, a lot of artists are too poor to even pay income taxes. And so you have a tool that is about tax credits for people who sometimes earn $20,000 a year. I'm going to ask you a question. And so it is about helping people who earn enough to even pay taxes to pay a little bit less. Yes. So it works well for the middle class, which I think is what people have in mind in the PMO and certainly in finance office when you think of helping people who are struggling. When you look at people who are struggling, struggling, Some of those tools are not necessarily going to reach them, and so it's going to be tricky to look at how effective it is, so I think it's more about the middle class than it is about the people who are actually, actually struggling when I look at the tools that were chosen in this budget. Rob, I mean, feel free to weigh in on the affordability measures, but the vast majority of the budget is about trying to invest in Canada, to attract investment, to allow businesses to expand. But that kind of stuff doesn't happen overnight. Good night. And that is kind of, I think, the challenge in terms of the budget as a communications document, how to explain that and tell Canadians that it's going to pay off at some point. Yeah. Supercharging the economy takes years for major projects. To go back to the affordability issue, I think on the middle class, one of the problems with the grocery benefit or the GST rebate is the income threshold of like $60,000 for a single person or $69,000 for a couple with a kid. That misses a great deal of the middle class that the Carney government needs to provide relief to in the suburbs for votes across the country. And I mean, it does help The most needy, but it... Kind of the cutoff point is a political problem for them, I think. There's new Abacus data pull out this morning showing a 10-point drop since September and how Canadians feel the government's handling the cost of living. And I think the risk is the collision between debt and deficit and affordability becomes one when the debt and deficit reaches a level where the interest payments are relatable to people. They are more for government than the health transfer in a few years. In British Columbia, They became the third most expensive ministry. And then people start to say, well, the government's spending more on debt than it could be spending on us in helping. And then it becomes a problem. And that's why, you know, Carney is going to have to cash in a lot of his sort of credibility as this skilled global recognized banker to tell people that debt and deficit and affordability are not the problem that they look like from the outside. Well, Nick Taylor, why don't you talk about that, the size of the deficit? Um, and, and debt, um, that, that, you know, if you talk to economists say, oh, well, you know, they're fiscally responsible, we're still going to have growth, but it is starting to get, uh, large and, and the conservatives certainly have fair points of criticism about that. Yeah, this is a banker's budget that distinguishes between the operating budget, so like the day-to-day costs of running the government, and the capital investment budget, which really adds a lot of red ink. This budget also includes the old chart that was always there, which has the big deficit And, of course, that's with a conservative look. And they look at the debt charges, like $85.5 billion in 2030, 2031. These are big numbers, and it's a big bet. The government's borrowing a lot of money to make these investments with the idea that this will produce growth that will raise all boats. It's a long-term budget from a banker prime minister who's used to thinking like a... A central bank governor in long-term forecasts, where the horizon is not the political challenge of tomorrow, which, of course, he also has to deal with as prime minister, but his instinct seems to be to think more broadly than that. And so it is a lot of red ink. But if the growth follows, then what I thought was interesting about that Abacus poll, which I'm glad Rob mentioned, was that Yeah, people in this country do not give a passing grade to the government of Canada right now on affordability. But that's also not the top priority, it was the top priority in the country, but they're not, they're sort of looking to the Carney government to deal with Donald Trump and to create jobs. And so the weakness on affordability doesn't so far seem to be heard in the government. No. Emily, do you think, though, that investing in business and, you know, the economy sort of writ large is a harder thing to explain and certainly is a thing, as we've all said here, that just takes more time? At a conference at Broadbent Bank, somebody said, Elbows Up might be one of the most successful rebrand of trickle-downs economics. And I think it goes back to what I was saying. Right. It is trickle-down economics. And I hope that if we, you know, it's a good old theory that if you invest in people that create the jobs, the jobs are eventually going to get there. Meanwhile, there's a lot of worry, I think, in a lot of very serious people's mind on AI and the speed at which it will be disrupting the job market, and especially for young people. And that seems to be the elephant in the room in terms of being able to say that what we're doing now. It's going to somehow help people you know mid and long term especially when the money that you're giving to businesses is actually some of it is helping them get even faster on the AI ball so that they even are cutting sometimes even more jobs that are entry level and calling that productivity increase and so I really have a lot of questions in terms of What we call increasing the productivity in Canadian economy, how much of that is actually making it harder, especially for young people, to actually get into the job market and have those jobs that are increasingly being replaced now by ChatGPT and Claude with the help and encouragement of the federal government in some ways. Rob, last word to you. Well, one thing that stood out for me on the budget is the showdown that's kind of coming with the premiers because ending the annual lift in the health transfer from 5% to 3% by 2028 is going to, you know, occupy the next council, the federation meeting, I think. There's a bunch of other transfers that are slowing down, you know, infrastructure money for child care, mental health and long-term care. Premiers need that money. They're balancing their own massive deficits and debt. And I think that part of it is going to be something that Carney's going to have to deal with the next time he meets the premiers as well. We welcome any moves to restore. A free-trading arrangement between Canada and the United States which is in the interests of American families struggling with affordability, it's in the interests of American workers looking for good, high-paying jobs and stability, and it's fundamentally in the interests of Canadians. That was the PM on Friday discussing the current state of trade with the U.S. following the Democrats' big midterms win this week. Pierre Poilievre, as you heard just a minute ago, has said that Canada now has the leverage, or more leverage, to push for a tariff-free deal. So what does it all mean? Let's bring back our Sunday Scrum. Nick Taylor-Vasey, the Ottawa Bureau Chief for Politico. Emily Nicolau is a columnist with Le Devoir. She's in Banff today. And Rob Shaw, political correspondent at Czech News, host of the daily Political Capital podcast. He's in Victoria. I was going to start with someone else. But Nick, I am going to start with you, because you talked to the prime minister like a week ago or 10 days ago or so, and were asking him about trade. And if I'm not mistaken, he said something like, we'll just like wait out Donald Trump. So I wonder what you think this midterm change means for how the government will approach the president. Yeah, he told us he would wait out the president if necessary, and then a day or two later had a conversation with the president. He said it was a good conversation. That's right, yeah. And so that seems to reflect the sort of topsy-turvy nature of... Whatever their personal relationship is and whatever impact that eventually has on coming to a deal. But the midterms, of course, they changed the dynamic entirely, right? I mean, Democrats have campaigned before on repealing tariffs and then not really gone all the way to doing that. They're promising that again. I did speak to Senator Peter Welch. He is a Vermont Democrat recently. Tariff revenue is pretty appealing for a government that has a huge deficit, huge debt like the United States. And he kind of visibly recoiled at the idea. And so how far they're able to go to actually get that across the finish line is an open question because the president can veto things when they get to his desk. But the Democrats do seem more determined than ever to. Do a solid for Canada. Yeah. Emily, what do you think might happen here in terms of how the Democrats play this and also how the prime minister plays it, like whether he has more leverage? I'm not convinced that he does in this moment. First of all, so it's still a long way before Democrats get to sit in Congress and the Senate. Yeah. Uh, the, the... The debate show, there's still a long way to go. When they do, it's still uncertain how much of a gridlock or how much Donald Trump will be using everything he can to be obstructing the House and the Senate, especially how the president has a lot of leeway when it comes to international affair. And that Canada is abroad. And so there is a lot of perhaps hope in the ways in which Democrat governors were also elected. And so in terms of state-to-state relationships, state-to-province relationships. But I don't necessarily share Pierre Poilievre's reading that what happened in the midterms automatically means it's going to be easier for Canada. There is also the scenario that a lot of very smart people Besides me, also C, which is that because Donald Trump is losing power internally, he might unleash or focus more on international affairs, because that's where he still has essentially a lot of discretionary power. And so there is all sorts of scenario on the table. It's going to be very hard to predict what happens next. The only thing we know is that the lay of the ground is different. And that Donald Trump is weaker, but sometimes, you know, threatened animals backed up against the wall. We don't know what's going to happen next. Anybody who feels like they do know what's happened next, I don't know where they take that certainty. Thank you. Thank you. I mean, certainly appointing Stephen Miller as the new chief of staff, Thank you. Thank you. Rob, is not is not the sign of a president who feels like he needs to course correct. It's a sign of a president who's going to double down. Yeah, I mean, that is a fighter, a take-no-prisoners supporter of the president's tariff agenda. And then if Dana White becomes press secretary, he's literally a fighter. That would show more of a president who's doubling down in protecting and defending what he's doing. I do agree that he still has unchecked, mostly unchecked, powers in the area of foreign policy and trade. I'm sure Congress and... We'll try to rein him in a little bit there. But the new Congress isn't sworn in until January the 3rd. It's around the deadline that the tariffs are set to rise again on auto and steel at 50%. And there's going to be a lot of pressure on the prime minister and the president to kind of do something before then. But what does Canada have to give away? In a deal with Trump that could be erased at any point during the remaining two years of his tenure. The prime minister said sometimes the U.S. signature is written in pencil and we know they want to come after the auto sector. We know dairy and aluminum steel are their targets. But the calculus of making concessions. Versus waiting him out is a risky one, and it looks more like the Prime Minister kind of wants to wait him out, but you cannot predict Donald Trump. That's the problem. Yeah, Nick, I also wonder whether there is, you know, Mr. Poilievre is suggesting that there's leverage here and that the prime minister should make a deal. I kind of wondered whether he was also trying to lay a trap for the prime minister, because it would seem hard to negotiate a deal with any tariffs now, given the rejection of that idea by Americans. And I don't see the president removing tariffs on everything. So it does seem actually more complicated, potentially. I think that's very true. I mean, I think every negotiation with... This president and his administration is complicated because we have to remember, too, the landscape of tariffs is diverse. This administration keeps finding new ways in new places and new laws dating back decades where they can rationalize and justify, at least until there's a legal challenge, the tariff that they hope to levy. And the administration has a lot of room to maneuver there. The reaction to those tariffs, whether it's from I mean, it's slippery, and it's hard to keep track and ultimately successfully fight back against that. Emily, do you think that the prime minister would be wise to try and get a deal before Congress is installed in January or should wait? It really is a tricky dilemma to be in, to even get any sort of deal as long as Donald Trump is in power. So the question of when is the less bad timing to sign a deal with Donald Trump, I think, is what the question is. Yeah. And the thing is that when the Democrats eventually, hopefully, do get back in power in the White House one day, whatever we sign with Donald Trump is also going to be setting a precedent for a Canada-U.S. relationship moving forward. And I think the midterms was very much a signal sent by the American people that they are hurting. And so they didn't want to you know, necessarily trust the Republican and Donald Trump because they've been hurting so much economically speaking. But the people that is hurting economically speaking is also sometimes can be very protectionist. And we've seen it with Democrats in the in the past, even during the Obama and the Joe Biden year. And it's not because the Democrats are back that it doesn't mean that America first is over and that when people are struggling, they're going to be willing to make deals with Canada that they don't see as very much in their self-interest. And making that argument is going to be Even with the Democrats, whether it be in the House, Senate, Governor, or eventually the presidency, I think we need to really get that and see that there is no relief of that America first thing going ahead, or at least I don't see any sign of it. Last 30 seconds to you, Rob. Well, I guess the hope from Canada is that a Democratic-controlled Congress will launch a bunch of investigations into Trump. His vice president, J.D. Vance, is in trouble. The defense secretary, Pete Hegseth, is in trouble. Perhaps they resign or try to launch leadership bids against him. I think the hope is his domestic agenda gets so complicated, he doesn't kick Canada around anymore. But he has this immense capacity to cause so much chaos, unlimited chaos, all at the same time that... I just don't see him letting up on this tariff dispute because he spent two years on it already and he's got two years left to go.