As a part of new budget targets set by the federal Treasury, all of Trudeau’s cabinet ministers are tasked with finding billions in potential cuts—slashing total program spending by over 15 per cent by the end of the Liberals’ term.
In effect, this divides Parliament principally between the vicious, pro-austerity Conservative Party and a Liberal-NDP alliance which is eagerly “exploring” new austerity measures.
Cuts to healthcare, education
Eight years ago, in 2015, the Trudeau Liberals secured a majority government with the slogan “investment and growth, not austerity.” However, today, the same government is now calling for every federal ministry to embark on a multi-billion dollar austerity program.
The government’s overarching plan will mean cuts totalling nearly $30 billion—to all departments. While promising that these cuts will merely be to consulting, professional services, and travel, the Liberals are also quietly demanding at least $7 billion in cuts to “transfer programs.” The largest of these “transfer programs” are the Canada Health Transfer and the Canada Social Transfer, which help fund schools, hospitals, social assistance programs, and other services for workers and the poor.
Indigenous Services Minister Patty Hajdu has also confirmed that the government’s budget cuts will impact Indigenous resources. Indigenous Services Canada (ISC) anticipates a significant reduction in spending, decreasing from $23.5 billion in 2022–2023 to $16 billion by 2025–2026. This projection also includes a reduction of over 1,000 full-time workers over the next two years. In particular, Jordan’s Principle, a program set up to ensure that Indigenous children are compensated for decades of discrimination in housing, education, and other services, will face cuts too.
As well, according to a letter obtained by the Globe, crown corporations—like Canada Post—are also expected to find a combined $1.3 billion in “savings” over the next four years.
And, closing the letter, treasury Board secretary Anita Anad invited public sector managers to get creative and help the Liberals find other cuts. “Organizations should review their programming to identify where there might be duplication, programs with lower value for money, or programs that do not address top priorities of the government.”
A spokesperson for the treasury opted to defend the cuts, claiming that firing workers and cutting health and social service transfers are about “eliminating waste.” This is how the Liberal cabinet describes the schools, assistance programs, health service and jobs that working class people depend on.
While demanding cuts to social services, the Liberals somehow found billions in additional funding for the military. They are planning to increase Canada’s defence budget to $63 billion by 2027.
As we’ve explained before, this aggressive military buildup is justified by the government in the context of the war in Ukraine, but it serves to defend the interests of Canada’s war profiteers and firms overseas.
In response to media coverage of Trudeau’s funding cuts, NDP leader Jagmeet Singh has expressed that he too has “concerns.”
This is slightly confusing because the cuts were first raised in the Liberals’ 2023–24 budget—one which the NDP eagerly signed on to. In one post, the leader even claimed that he helped write some of the budget—boasting that it supposedly “delivers for Canadians.”
Despite its professed “concerns,” however, it’s notable that the NDP has not actually put forward any promises to do anything to stop the cuts. It is little wonder that, as the Liberals have seen their support collapse, the NDP has fallen in the polls as well.
Pressure from the capitalists
These cuts are not just coming because Trudeau’s cabinet members are bad people—rather they reflect the needs of capitalists.
In the wake of COVID-19, Canada’s national debt has soared. The consequences of these measures have manifested in a substantial increase in the 2023–24 budget deficit, which has grown by an additional $10 billion. All told, Canada’s deficit stands at $1.1 trillion.
This has led some on Bay Street to demand cuts explicitly. In an article for the Globe, BMO’s head of Private Wealth Andrew Auerbach called the pile of debt “shockingly high,” and warned of an impending disaster.
The Liberals have followed suit.
Finance Minister Chrystia Freeland has already signalled her willingness to cooperate. Freeland told an audience at Toronto’s ultra-exclusive Empire Club last Fall that she planned to impose “fiscal restraint” for the Canadian working class.
It was, after all, the Liberals who introduced the deepest austerity program in Canadian history back in the 1990s. Reflecting on this in her budget speech, Freeland said “Our country has a proud tradition of fiscal responsibility. That is a tradition we are determined to uphold.”
Polls reflect party dissatisfaction
These budget cuts are not a matter of which politician is in power; instead, they reflect the crisis of capitalism. Voter turnout has been steadily decreasing over recent years, as the crisis has made the differences between Canada’s politicians hard to discern.
The status quo, as presented by the Liberals and supported by the NDP, is one of crisis, rising costs and, now, cuts. And, unsurprisingly, it has enthused very few.
As well, by drifting closer to the Liberal Party, the NDP has effectively forfeited its position as an “opposition” to the Liberals.
Some of the anger at the establishment appears to have been captured by the right-wing populist Pierre Poilievre and the Conservative Party. But this enthusiasm will be short-lived. Poilievre’s politics are just a different list of policies and stances that will actively harm the working class, such as his promotion of “right-to-work” laws and attacks on migrant workers.
Increasingly, ordinary people are concluding that all of the parties represented in Parliament are bankrupt—because they are. All of them accept the existence of capitalism and the rule of the capitalist class. And, in a time of crisis, the needs of the capitalists take priority. That will mean new cuts and new attacks, introduced by the Liberal-NDP pact or the Tories.
Seeing no way out of the current economic crisis, more and more workers and youth are turning against all of the major parties—and looking to revolution, instead. To break free from this oppression, we must fight for a communist revolution.