Carney's Ambitious Budget: Technocracy, Spending, and First-Mover Opportunities

If one were to overspend — is this how it should be done? 

K. Moody says it is not. A man with experience reflecting on predecessor PMs and their budgets, he finds this one far from transformational. 

Still, we analyze without the benefit of that generational knowledge.

Fiscal Strategy and Technocratic Approach

Diversifying trade partners and initiating defense independence — is this strategic foresight or fiscal fiction for Canada? It’s bold. As presented, everyone else is overspending. Will Canada be the one to do it better?

A lot of talk surrounds Carney’s conflicts of interest. I’m not steering there right now. For me, it’s not personal. I want to focus on his technocratic approach and look for holes in it. That is the scrutiny I’m interested in applying.

He wants to spend, not cut. A guy like A. Williams would know how to better model and apply the debt-to-GDP ratio. The data is potentially skewed to fit the narrative. 

Does Carney have it right? Canada has a buffer relative to other nations, suggesting we are behind in GDP-producing assets on the balance sheet. That seems central to his approach. I’m not sure Carney is guided by political loyalty like Trudeau; I’m guessing he will favor technical merit where unconstrained, but I don’t know the guy.

For argument’s sake, let’s put “high”-carbon GDP producing assets on the balance sheet — call them capital investments. How does this model handle global shocks? We want to check how a Conservative, unconstrained spending budget would handle scenarios. Oil and gas at full throttle under prime conditions — what does that do? Does it leave the economy vulnerable?

It’s simply not enough to critique spending in a party-to-party comparison. 

Foreign investment currently diverts to the U.S., but the budget narrative suggests it should be coming here next, after the productivity super deduction. Highly ambitious — a best-case scenario. They really sell it in the budget report, but I’m not convinced it’s that simple. Canada lacks many attributes, including specialized and skilled labor, and the report is overly optimistic about how effectively investment can leverage these "strengths".

Opportunity, Risk, and First-Mover Advantage

Could shifting toward capital spending position Canada as a first mover in key industries? By investing in infrastructure, technology, and productive assets ahead of others, we might set the standard and shape the culture of innovation. Has Canada ever taken the lead like this before? Are we aiming to become trendsetters?

This is risky. 

But we also need to assess the risk of not spending. Are we being shut out of emerging opportunities if we do not? Carney wants to double exports to non-U.S. markets. He’s somewhat transparent about timelines, data models, and capital allocations — unusual for a Liberal budget — but is the plan too complex or ambitious to execute? 

Do we need more safeguards for such a bold approach? What would they look like? What should we watch for?

Housing, Defense, and Strategic Culture

With housing, federal involvement may begin to shut out the private sector — as B. Szabo has speculated. Would this have happened anyway, and do we need government intervention? Again, we need to model the Conservative Party approach. I’m not there yet, but I do know that globally, many G7 countries face similar issues. A stuck position.

His long-term outlook on defense and supply chains is ambitious. Is he serious? He wants Canadian supply chains built domestically, not imported. This represents a culture shift. We are not used to thinking of ourselves as an independent force, which makes this plan both uncomfortable and intriguing.

It would also be complementary to diversifying trade partners.

I’m watching for what K. Moody writes next. I don’t know the history— I had to look up what Harper did. It turns out the first thing he did was drop the GST from 7% to 6%, and later to 5%. No such cuts with Carney.