The morning after Mark Carney’s 30-minute address to an audience at the University of Ottawa, Pierre Poilievre appeared before reporters to offer his review. The Conservative leader was unimpressed.
“This was the sacrifice speech,” Poilievre said, gamely trying to coin a moniker.
Poilievre’s specific charge was that Carney was asking for sacrifices from young Canadians, a cohort that is already faced with acute challenges. But given Poilievre’s own stated belief in the need to be precise when describing someone else’s words, it’s worth noting that Carney’s warning of coming sacrifices was not specific to young people.
The prime minister was speaking at a university to an audience that seemingly included a number of students. And he went further than he has before to suggest that not all of the decisions ahead will be easy or perfectly enjoyed by all.
“The upcoming budget will balance the operating deficit in three years by reducing wasteful government spending and doing more with less,” Carney said. “But the fact is, even with such efficiencies and with better management, we will have to do less of some of the things that we want to do, so we can do more of what we must do to build a bigger and better Canada.”
It remains unclear exactly what those sacrifices will be or how they will be distributed.
Nonetheless, the mere mention of sacrifices makes clear that Canadians are about to be faced with some real choices about how to move forward in a very different world.
WATCH | Carney hints at ‘sacrifices’:
At Issue this week: Prime Minister Mark Carney drops hints that ‘sacrifices’ are coming in the upcoming federal budget. Conservative Leader Pierre Poilievre tries to clarify his Trudeau jail time comments. Plus, Canada’s warming relations with India.
The politics of sacrifice
If Carney’s talk of sacrifice caught the attention of journalists and opposition politicians last week it was perhaps in part because political leaders so rarely use the word, at least outside of extraordinary times. Justin Trudeau spoke of sacrifice during the pandemic, but it would appear to have been 17 years since a finance minister explicitly invoked a spirit of sacrifice during a major speech on budget policy in the House of Commons.
As the Great Recession took hold in the fall of 2008, Jim Flaherty said the federal government would emulate Canadian families facing sudden economic challenges.
“To protect the future they want, they make sacrifices today,” he said.
Mind you, that fiscal update — which proposed, among other things, to eliminate the per-vote subsidy for political parties and change the rules around pay equity in federally regulated workplaces — went over so badly that Stephen Harper’s Conservative government had to completely reverse course to avoid being defeated and replaced by a Liberal-NDP coalition.
Paul Martin didn’t use the word sacrifice when presenting his pivotal 1995 budget which made steep cuts to federal spending (nor did the word appear in the 197-page budget document). But Martin did use the word in his budget speeches in 1996 and 1997 to describe what Canadians had experienced.
“We will not break faith with the Canadian people after all the sacrifices they have made and after all that we together have been able to achieve,” he said in 1997.
WATCH | Poilievre reacts to Carney’s pre-budget speech:
Reacting to Mark Carney’s pre-budget address, Conservative Leader Pierre Poilievre told reporters on Thursday that the prime minister was offering ‘the normal buffet of broken promises’ and called the address ‘the sacrifice speech to Canadian youth.’
In 2025, Carney may want Canadians to see elements of both 2020 and 1995 — an extraordinary moment of crisis that requires remarkable action by the federal government.
His pre-budget speech was not the first time Carney has used the word — in June, he spoke of possible sacrifices to come when he announced the government’s intention to rapidly accelerate a planned increase in defence spending. This talk of sacrifice also comes after months of hinting at tough choices that will have to be made.
All of which could be intended to prepare Canadians for the results of the Carney government’s spending review, which could ultimately result in spending cuts of somewhere between $15 billion and $20 billion — the largest reductions in federal spending since Martin’s cuts in the mid-90s.
Budgets require choices, trade-offs
Warnings about the health of federal finances are sometimes overblown — Canada is not currently faced with a fiscal crisis. But the Carney government could be facing a real pinch, wanting to invest significantly in things like defence, infrastructure and housing without adding too much to the federal government’s debt load or putting Canada on a course that could eventually create a crisis.
When the budget is tabled next week, it will almost certainly show a higher deficit than what was projected a year ago. But it might also hint at the extent of the sacrifices to come in the form of spending cuts — and those cuts almost certainly won’t be painless.
Poilievre will almost certainly focus his criticism on the size of the deficit — he has insisted it should be no more than $42 billion and otherwise suggests he is opposed to deficit-spending on principle. But if Poilievre has a detailed plan for achieving those objectives that would require no sacrifices of anyone, it would be interesting to see it.
To the extent that sacrifices are necessary, the first question might be how they will be distributed — who will be asked to make them and how fair that is. Possibly only management consultants will mourn if the government severely curtails how much it spends on management consultants, but it seems unlikely that the sacrifices will be limited to the offices of McKinsey.
What might follow Tuesday’s budget is a debate about desirability about those sacrifices and possible alternatives. Depending on what comes next, could it also become necessary to talk about further sacrifices, above and beyond the Carney government’s relatively narrow spending review?
For the sake of argument, raising the GST by a single percentage point — from five per cent to six per cent — would generate approximately $10 billion in extra revenue. But new polling from Abacus Data shows just 23 per cent of Canadians are inclined to support such a change.
Paul Kershaw, a professor of public policy at the University of British Columbia and the founder of Generation Squeeze, has proposed phasing out Old Age Security (OAS) for the wealthiest seniors and repealing a pair of tax credits, the Age Credit and the Pension Income Tax Credit. Kershaw estimates that would free up $14 billion in federal funding ($2.5 billion of which would be directed to low-income seniors). But previous prime ministers have famously struggled to tinker with OAS.
The prerequisite for any kind of major changes might be demonstrating that the federal government has made a serious effort to eliminate truly unnecessary spending and making the case that sacrifices truly are necessary.
In truth, almost all spending and policy decisions involve trade-offs. It’s just that, in most cases, political leaders try hard to pretend there aren’t.
In that respect, Carney’s use of the word sacrifice might be paired with his promise in that same speech to “always be straight about the challenges that we face and the choices that we must make.”
If these are serious times, they might at least deserve a serious conversation about what to do.
