Robert Asselin: The federal budget has no answers on the question of growth
To start, it was clear for some time that the government’s decision to spend more than $100 billion in so-called short-term stimulus was a political solution in search of an economic problem. If you search for an output gap, even in the short term, you’ll find the budget arithmetic doesn’t match the current economic data. One can try in the 739 pages to find a clear plan to make Canada more productive and competitive. Governing is about making choices, but if this budget can be defined as anything it is everything.
We need to encourage more innovation to grow more firms. Essentially, doubling down on programs that do not address our innovation shortcomings and have yielded few results to date. IRAP, a well-intended but unambitious program at the National Research Council, is the best we could do apparently. in its budget, are acting more boldly by creating mission-driven, DARPA-like institutions that are unconstrained by the pitfalls of Weberian bureaucracy.
While the Biden administration recently went big on leveraging public procurement to incentivize business innovation and create demand for new products and services, it’s still business as usual in Canada.
On the same day Finance Minister Chrystia Freeland tabled the budget, NASA flew a helicopter on Mars and charted an unprecedented new partnership with the private sector on space exploration. «With this huge stack of new programs, initiatives and measures, I can already see the long queue of ministers and their senior officials in line at Treasury Board meetings with their budget submissions. This budget adds many layers of duplication and bureaucratic complexity to a system that was not known for its nimbleness and agility. A more focused public-private partnership in key areas to drive growth would achieve better results.
After doubling our federal debt in only six years, and spending close to a trillion dollars, not moving the needle on long-term growth would be the worst possible legacy of this budget.
Source: Robert Asselin | The Hub