Prime minister cautions Canadians as Ottawa moves to curb spending to balance near-record military expenditures

Mark Carney has told Canadians to prepare for austerity measures and his finance minister warned of “tough choices” in the coming months, as the government attempts to balance near-record defence spending, cuts to government programs and a trade war with the United States.

Carney, the former central banker and economist turned politician, has been meeting senior ministers before the fall budget, and hinted cuts were coming to the federal bureaucracy.

“It’s an austerity and investment budget at the same time. And that is possible if we’re disciplined,” he said, adding that there would be no cuts to healthcare spending, education transfers or transfers to individuals.

In remarks critical of his predecessor, Justin Trudeau, Carney said the rate of government spending was too high and outpaced the growth of Canada’s economy – a view shared among senior cabinet ministers who also held top-level posts under the previous prime minister.

“Will there be tough choices to make? Definitely. Is the nation ready? I would say yes. I mean, Canadians have elected us to do things differently,” the finance minister, François-Philippe Champagne, said on Thursday of the “leaner” federal workforce he and Carney envisioned.

“We said we’re going to spend less so we can invest more. And you know, people understand that. My mother understands that.”

At the same time, Carney has promised a significant increase in defence spending and faster development of major infrastructure projects – both of which will require billions in government spending. In June, Carney said Canada would reach Nato’s 2% military expenditure target this fiscal year, five years ahead of his previously announced schedule.

McCallion said the recent focus on austerity and the sharp departure from Trudeau’s spending on progressive programs “is not surprising” because the party “acts like a chameleon” to capitalize on what voters seem to want in the moment.

Those policy shifts have produced challenges for Carney, however.

Running April’s federal election on an elbows-up policy that vowed to fend off the threat from Donald Trump, Carney has been forced to contend with the reality that the American and Canadian economies are deeply enmeshed.

“There’s a dichotomy within his image of this guy who’s going to fight for Canada versus someone who won’t take an inflammatory situation and make things worse,” she said. “Carney is trying to walk this fine line between someone who will fight, which is what Canadians wanted, and then being the guy who’s not going to, you know, have inflammatory policies and make things worse by fighting back too hard.”

In August, Carney announced his government would remove a handful of retaliatory tariffs in a sign of goodwill towards the US as the two sides worked to finalize a trade deal.

Jean-Marc Léger, a prominent Canadian pollster, was invited by the Liberals to speak with ministers and told reporters that tariffs had slipped in importance among Canadians.

“Last year, they were the No 1 issue and that’s one of the reasons this government was elected,” Léger said. “Today, it’s changed. Now, they only rank fourth.”

Léger said the economy was a central issue among voters and that Carney’s team were trying to make it the “centre” of their government.

As well as attempting to reconcile apparently contradictory promises to save and spend, Carney also seems to be seeking to strike a balance in his relations with Trump, whose threats to Canadian sovereignty defined the prime minister’s election.

Eyebrows were raised when Carney invited Kevin Roberts, the president of the Heritage Foundation, a rightwing thinktank with close ties to the White House, to address the ministerial meeting. The Heritage Foundation was a key architect of Project 2025, a proposal that envisioned an ultra-conservative reshaping of the US federal government.

Roberts cancelled his appearance, but not before the invitation prompted controversy within the Liberals.

“It’s an interesting strategy to kind of invite the opponent into your fold, and try and figure them out a little better,” said McCallion. “Because when it comes to figuring out what the White House wants, increasingly it feels difficult to figure out where the goalposts are. Maybe talking to the Project 2025 team will help with understanding of what is a real ask and what is a distraction?”

Source: www.theguardian.com