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How Ottawa Turned Debt Into a "Sovereign Wealth Fund" · Kvetch & Release

• 0:00
  Speaker 1: Every Friday morning at this time, we welcome back John
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  Speaker 1: Litke with our great feature, Litke's Got a Take. And
• 0:06
  Speaker 1: good morning, John.
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  Speaker 2: Good morning, Gene.
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  Speaker 1: Okay, more on the budget. Carney wrapped up his budget
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  Speaker 1: in the language of masters of our own destiny, I
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  Speaker 1: guess we could say. And as we were talking with Chris,
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  Speaker 1: the centerpiece is a $ 25 billion sovereign wealth fund. The catch, though, John,
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  Speaker 1: we're running a $ 62 billion deficit. Now, can a country
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  Speaker 1: realistically build a national wealth plan by putting the seed
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  Speaker 1: money on a credit card, which essentially is what they're doing?
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  Speaker 1: I mean, what happens if those hand-picked investments fail? Yeah.
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  Speaker 2: Gene, I don't know. Calling borrowed $ 25 billion a sovereign
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  Speaker 2: wealth fund, that is financial gaslighting. Norway built a wealth
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  Speaker 2: fund off of actual oil surplus. Carney is maxing out
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  Speaker 2: collective national credit card at 5% interest and telling us
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  Speaker 2: that we're getting rich off of it. But, I mean,
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  Speaker 2: this is straight out of Glenn Gary, Glenn Ross. He's
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  Speaker 2: kicking open the doors of the House of Commons, dropping
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  Speaker 2: $ 62 billion of red ink on the desk, and telling Canadians,
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  Speaker 2: always be closing. I mean, this is... It's nuts. I mean,
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  Speaker 2: I just... Of course, though, he's so high in the
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  Speaker 2: polls here that everyone's going to go along with it.
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  Speaker 2: And it's just one big gamble. So they're going to
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  Speaker 2: tell us that they're going to be picking industrial winners.
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  Speaker 2: But name me one major commercial venture that this bureaucracy
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  Speaker 2: runs on time or under budget. I mean, heck, they
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  Speaker 2: couldn't even get the Arrive Can app working without blowing
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  Speaker 2: $ 50 million.
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  Speaker 1: Yeah, I remember that. Okay, so Ottawa is celebrating having
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  Speaker 1: the lowest business investment tax rate in the G7. Now,
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  Speaker 1: it sounds great, but it's tailored for large companies writing
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  Speaker 1: off things like heavy capital equipment, industrial tech, automation. Main
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  Speaker 1: street businesses carry inventory and they pay wages, but they
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  Speaker 1: get left out on the cold. I mean, is this
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  Speaker 1: just for the corporate giants over Main Street?
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  Speaker 2: It feels like it. I mean, this is classic Ottawa
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  Speaker 2: picking favorites and leaving the rest of the country to starve.
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  Speaker 2: And I saw, you know, the activist class like Avi Lewis.
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  Speaker 2: I saw him run out yesterday and get in the
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  Speaker 2: fight with the finance minister on live TV saying that
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  Speaker 2: this is a $ 36 billion corporate gift. But I think
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  Speaker 2: that misses the mark as well, because in places like Windsor,
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  Speaker 2: the tooling and parts shops genuinely need to be able
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  Speaker 2: to write off big machinery just to keep Michigan and
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  Speaker 2: Ohio from wiping us off the map. So the real scandal, though,
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  Speaker 2: it's not that factories are getting write-offs. It's that Main
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  Speaker 2: Street gets completely written off from it. So if you're
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  Speaker 2: a multi-billion multinational that's buying heavy robotics, It's great for you,
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  Speaker 2: but if you're a local, it's not going to be
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  Speaker 2: that great because you really don't get a darn thing.
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  Speaker 2: So Carney's team drafted a budget for boardrooms and for
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  Speaker 2: conglomerates because they're fine that Main Street is going to
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  Speaker 2: continue to do what Main Street does, which is some
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  Speaker 2: will survive and some will fall, but they'd never take
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  Speaker 2: that risk when it comes to something bigger.
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  Speaker 1: This was of interest to me. The federal government claims
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  Speaker 1: it's charting a course to end homelessness. within 10 years
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  Speaker 1: by backing construction of capital infrastructure. Well, I know something
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  Speaker 1: about homelessness. Sadly, my uncle froze to death on the
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  Speaker 1: streets of Toronto. But the fine print offloads ongoing shelter operations,
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  Speaker 1: mental health support, and frontline triage to provinces and cities
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  Speaker 1: that are struggling, like in the Niagara region, because of
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  Speaker 1: those two flash floods. So... Are we watching a genuine
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  Speaker 1: national solution, and I don't think it's going to happen,
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  Speaker 1: or just federal ministers taking credit for ribbon cuttings and
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  Speaker 1: things like that?
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  Speaker 2: Federal ministers love to have their photo ops and cut
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  Speaker 2: ribbons on concrete or in front of fake homes that
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  Speaker 2: they were building. Remember that one that they did a
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  Speaker 2: while back?
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  Speaker 1: Yeah.
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  Speaker 2: I think that there is a lot of merit here.
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  Speaker 2: No city that's dealing with a homelessness epidemic like most
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  Speaker 2: are right now is going to be upset about the
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  Speaker 2: feds saying, here's a bunch of cash. We're going to
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  Speaker 2: build the infrastructure to take care of the shelters themselves
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  Speaker 2: and the wraparound services. The issue is it's the ongoing
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  Speaker 2: costs that are associated with it that are being downloaded
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  Speaker 2: onto the provinces that will be downloaded directly onto the cities.
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  Speaker 2: So that's what makes this a shell game here. And
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  Speaker 2: even in Windsor, when they have housing funds, for example,
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  Speaker 2: they were mandating that we had to have four plexes
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  Speaker 2: by right, whereas we already have three plexes by right.
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  Speaker 2: But they kept that money, and they wouldn't give it
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  Speaker 2: to us unless we changed to go with it. Now,
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  Speaker 2: my recommendation to the city is to make the changes
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  Speaker 2: to get the cash. But We shouldn't have these shell games,
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  Speaker 2: quite frankly, when it comes to these important issues.
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  Speaker 1: So Pierre Poliev last night branded the budget mastered by death,
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  Speaker 1: while the prime minister insists that Canada is stepping into
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  Speaker 1: an investment super cycle. His terms, not mine. Now, the
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  Speaker 1: sales pitches, I guess we can borrow today to build
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  Speaker 1: things up tomorrow. But servicing that debt eats up so
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  Speaker 1: much money. It is $ 2, 000 a second or $ 1. 4 billion
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  Speaker 1: every week.
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  Speaker 2: Yeah, I don't know how you can spin this, quite frankly,
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  Speaker 2: because the debt is big. You know, try telling the
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  Speaker 2: bond market that it's not as big as it is.
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  Speaker 2: And you're not able to pay interest charges and ratios.
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  Speaker 2: We're paying them in cold, hard cash on a daily basis.
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  Speaker 2: So debt servicing is just, it's blowing off the charts.
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  Speaker 2: And that's money that's being taken out of our health
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  Speaker 2: care system and out of hospitals just to pay the financiers. So,
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  Speaker 2: you know, we look at the Sudden pivots that are
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  Speaker 2: in this budget, and overall, I don't have an issue
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  Speaker 2: with most of what's going on here, but it's just
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  Speaker 2: it's always the sales pitch, right? I'd rather them just
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  Speaker 2: be completely honest and frank with us and say, hey,
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  Speaker 2: we're going to continue to borrow and borrow and borrow,
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  Speaker 2: and we're taking a lot of big bets right now,
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  Speaker 2: but we think it's going to play off, and if
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  Speaker 2: it doesn't, you don't have to vote for us again.
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  Speaker 2: The risk is that we can decide not to vote
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  Speaker 2: for them again, but that doesn't change our financial state
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  Speaker 2: afterwards if things really do go bad.
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  Speaker 1: Picking up on what happened in Rome earlier this week,
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  Speaker 1: you're calling this the Pope versus Bob Dylan budget. Mark
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  Speaker 1: Carney's high-minded vision in white robes clashing against gritty black
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  Speaker 1: alley realities like red ink, rising debt, and political compromises.
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  Speaker 1: So if you strip away all of the rhetorical gymnastics,
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  Speaker 1: is Carney genuinely building an independent Canadian economy today? Or
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  Speaker 1: is he asking everyday Canadians to co-sign what amounts to
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  Speaker 1: an extraordinarily expensive gamble?
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  Speaker 2: I think we're all being drafted into a desperate financial
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  Speaker 2: pyramid scheme potentially here. I mean, again, it's not being
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  Speaker 2: sold that way, but this budget is a massive high-risk
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  Speaker 2: bet that Ottawa can spend our way out of structural
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  Speaker 2: economic rot before the compounding debt interest would suffocate us.
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  Speaker 2: And we can, you know, hope that Mark Carney, with
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  Speaker 2: all of his brilliant financial backgrounds, will be able to
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  Speaker 2: save us. But this is still the public purse, and
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  Speaker 2: I would rather it not be run like it's a
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  Speaker 2: back alley casino sometimes. Now, listen, stockpiling critical minerals, that's
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  Speaker 2: a very good thing. And if we're able to do
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  Speaker 2: it with maple syrup, we should probably be doing it
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  Speaker 2: with critical minerals as well. I don't think that's a problem.
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  Speaker 2: But I don't know how you can say that we're
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  Speaker 2: masters of our own house and masters of our own
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  Speaker 2: destiny when we're mortgaging the house a second time.
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  Speaker 1: Yeah, and third, and fourth, and fifth, sixth. Hey, listen,
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  Speaker 1: great takes all week. Have a fantastic weekend. We'll talk
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  Speaker 1: to you on Monday, my friend.
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  Speaker 2: Thanks, Gene. Talk to you then.
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  Speaker 1: There he goes, John Litke. Litke's got a take.