In The Weekly Wrap, Sean Speer, our editor-at-large, analyses for Hub subscribers the big stories shaping politics, policy, and the economy in the week that was.
The costly consequences of Trudeau’s “inflate the state” governance
This week’s reports that the Carney government has launched a government-wide review of program spending in order to generate up to 15 percent in fiscal savings actually finds its origins in the 2015 election campaign.
Over its time in office, the previous Harper government had reduced revenues as a share of GDP to its lowest levels in decades. In the context of a then-political consensus in favour of balanced budgets, there was a sense that this represented a hard constraint on future governments’ spending ambitions.
During the 2015 campaign, the Liberal Party, under leader Justin Trudeau, rejected that premise. It didn’t litigate the Harper-era tax cuts, with some minor exceptions. It instead wrestled itself out of the revenue constraint by committing to deficit spending. The Liberals weren’t self-conscious about it either. They turned their promise to run deficits into a political virtue. And it worked. Canadians were happy to vote for a party that offered a free lunch.
In hindsight, though, the Trudeau government’s acceptance of deficit-financed spending was more than a clever electoral strategy. It became a public finance strategy to grow program spending faster than revenues and create a structural deficit that would eventually necessitate tax increases to catch up.
Progressives often characterize conservative tax cutting as an effort to “starve the beast.” The notion is that right-wing governments cut taxes to such levels that spending reductions become required to bring expenditures into balance with a new and lower revenue baseline. The claim is that this precludes conservatives from having to lead with unpopular spending cuts and instead has them create the fiscal conditions to make such cuts eventually necessary.
The Trudeau government’s fiscal policy effectively did the opposite. By accepting Harper-era tax policy—and its lower revenue baseline—and then increasing spending against it through large-scale borrowing, it laid the groundwork for eventual arguments that taxes need to go up to bring revenues into line with new, permanent, and higher levels of federal spending. If Conservatives are accused of “starving the beast,” one might characterize the Trudeau government’s fiscal policy as a strategy to “inflate the state.” The Carney government is now left trying to solve for the fiscal constraints imposed by its predecessor—which, it must be said, involves a considerable overlap in terms of personnel among the cabinet, caucus, and key staff roles. The prime minister has a set of competing fiscal priorities. He wants to boost defence spending, keep taxes low and competitive, preserve core federal programs as well as Trudeau-era entitlement programs, and reduce the deficit. The launch of a spending review should generate some fiscal savings, but given the tension between the review’s scope and the growing structural deficit, the exercise is unlikely to be sufficient. As Trevor Tombe wrote at The Hub this week, the exclusion of transfer programs to individuals and other orders of government means that the Carney government would need to cut non-transfer payments—what is called “direct program spending”—by as much as 40 to 60 percent if it was to fully close the revenue-expenditure gap. This realization has led to growing calls for tax increases, including hikes to the GST, to bring revenues in line with higher federal spending. One gets the sense that there’s sufficient momentum for these ideas in policy circles that we may see something in the fall budget or a future one. If so, it amounts to slow yet steady growth in the size and cost of government that started out presented in cost-free terms and ended with tax hikes. It’s a case of “big government by stealth” or “backdoor taxation.” Although the Trudeau government is ultimately responsible, Canadian voters have some culpability too. They’re the ones who let themselves be convinced back in 2015 that there’s such a thing as a free lunch. The biggest problem with the CBC is that it exists at all The recent resignation of CBC host Travis Dhanraj amid allegations that he was harassed for not being sufficiently progressive has rightly generated a flurry of attention. If the claims are accurate, they reveal a toxic work environment where ideological conformity is enforced not just subtly but coercively. But let’s not pretend that the idea that the CBC leans Left is some sort of breaking news. The broadcaster’s institutional monoculture is both self-evident and well-documented. Its hiring practices, editorial outlook, and general ethos reflect a progressive worldview that’s broadly disconnected from a large share of the population, including many of the taxpayers who finance it. If Dhanraj was mistreated for failing to fall in line, there ought to be accountability. He deserves recourse. Those responsible should face consequences. Still, we shouldn’t get stuck on the idea that the CBC’s main problem is that it’s left-wing. If that were the case, we could at least imagine solutions: appoint conservative executives, hire right-of-centre hosts, and bring in more ideological diversity in the name of fairness and balance. But that’s not the CBC’s biggest flaw. Its core problem isn’t its worldview; it’s that it exists at all. The rationale for a public broadcaster was always predicated on a scarcity model: that there weren’t enough cultural or news options to sustain a robust media landscape in a vast country like Canada. That world is long gone. Today’s media environment is abundant, diverse, and decentralized. We don’t need a publicly funded voice—Left, Right, or otherwise—when Canadians have no shortage of platforms to inform, entertain, and challenge them. So when conservatives focus solely on the CBC’s bias, they’re missing the point. The issue isn’t that it’s a bad public broadcaster. It’s that we no longer need one. Dhanraj’s story is a regrettable chapter in the CBC’s ongoing decline. But let’s be clear: the solution isn’t to fix the CBC’s ideology. It’s to move on from the CBC altogether. An ode to the button-down collar This year marks the 125th anniversary of one of the most quietly revolutionary innovations in men’s dress: the button-down collar shirt. First introduced in 1900 by Brooks Brothers, the style was inspired by English polo players who used buttons to keep their collars from flapping in the wind. But what began on the playing fields of Britain quickly became something far greater in the cultural context of North America. The button-down collar shirt emerged as a defining expression of the continent’s egalitarian spirit. I’ve been exclusively wearing button-down collars for more than a decade. Part of it is aesthetic—I like the way they look. But mostly it’s philosophical. The button-down collar shirt is the quintessential North American look. It speaks to the values that animate this continent’s best traditions: individualism, meritocracy, and social mobility. Unlike the stiff, detachable collars of European formalwear, which conveyed class distinction and sartorial hierarchy, the button-down collar is democratic in both form and function. It’s elegant without being elite. It’s tailored without being pretentious. Anyone can wear one. That’s the point. In many ways, the button-down collar was a fitting innovation for a society that rejected inherited privilege and emphasized self-making. It conveyed respectability without resorting to formality. It suggested seriousness without snobbery. It was (and still is) a shirt for the aspirant and striver. Brooks Brothers continues to produce its iconic Oxford cloth button-downs to this day, and many others now make their own versions. It has become a staple of men’s wardrobes and a subtle but powerful symbol of North American character. The button-down collar shirt may seem like a small thing. But 125 years later, it still represents something big: the quiet dignity of a society built not on class, but on effort.
Sean Speer is The Hub’s Editor-at-Large. He is also a university lecturer at the University of Toronto and Carleton University, as well as a think-tank scholar and columnist. He previously served as a senior economic adviser to Prime Minister Stephen Harper.
