April 08, 2022

• TLDR: the Liberals are hoping that if they throw enough money at the private sector, an army of Elon Musks will emerge from the darkness armed with even more private capital to save humanity and the Canadian economy along with it.

You may have heard it in the speech, but the government is now relying on a made up thing called "Modern Supply-Side Economics". Supply-Side Economics is called neoliberalism.

We have moved from Modern Monetary Theory (MMT) to "modern" Supply-Side Economic (MSE). There is nothing "modern" about supporting profits with taxes and that is all the current budget is really about.

From a classical economics/Marxist perspective, the budget is a disaster of liberal mysticism over economic materialism that will lead us nowhere in the fight against climate change, just transition, investment in mitigation, and support for workers and the economy.

Add to this the one thing that will drive production – the one area where the Liberal diverged completely from mysticism – is defence spending. Profit subsidy, yes, but also direct government-directed production and investment in state-controlled research and development.

One can take the analysis of the post-secondary sector and apply it across most of the budget. It is profit subsidy masquerading as investment. The government creates multiple (more than three) different organization to give-away cash to the private sector. All while tacitly admitting that this strategy to deal with climate change and economic transformation has not worked.

The budget also is absurdly very clear about the fact that Canada is an order of magnitude below the necessary investment in clean energy necessary to meet our international obligations. The answer to this gap from the liberal? The liberals will go fishing for magic private finance to save us with guaranteed profits as the bait.

• Greenhouse gas issue? No problem: $2.6B in tax cuts for oil and gas to implement mythical carbon capture and storage non-solutions.
• No green energy to get oil out of the ground? No problem: $120.6M for "modular" nuclear reactors.
• Pandemic drug supply issues? No problem: $1B to the Strategic Innovation Fund for Pharma companies.
• Drug production issues? No problem: $1.2B for big Pharma bio-manufacturing.
• Supply chain issues? No problem: $750M Global Innovation Clusters
• Security of research IP issues? No problem: $125M Research Support Fund
• Defence issues? No problem: Canadian Innovation and Investment Agency
• Innovation and marketization of products issues? No problem: $47.8M Innovation, Science and Economic Development Canada
• Low emissions food supply issues? No problem: $100M crop varieties fund to agro-industry partnered university researchers.

The budget is a classic Liberal budget. Nothing shocking, but unfortunate if you care about the future.

• Russia and Ukraine export grains and sunflower oil, accounting for about 30 per cent of global wheat trade.
• Russia has continued shipping wheat since it invaded its neighbour in February, but sanctions have complicated payments, leading to supply uncertainties.
• In 2021, 36 out of 55 countries with food crises depended on Ukrainian and Russian exports for more than 10 per cent of their total wheat imports, including 21 countries with a major food crisis.

• The 2021 reform, which has not yet taken effect, proposed to change electricity dispatch rules to favour state-owned utility CFE over private investment.
• The right is using this to say he is against green energy since that is where private investment has landed (obviously).
• Capital is very mad – $10B losses mad.
• GFE is also poised to take over lithium mine investments.

The decision lands amid an already fragile business climate. The US and the private sector argue López Obrador’s proposed reforms threaten [$10B] billions of dollars of investment, violate trade agreements and will lead to dirtier, more expensive power.

• The country’s lower house will next week discuss and vote on a related constitutional energy reform proposed by López Obrador after lower courts blocked the 2021 law.
• The constitutional changes also include nationalising lithium and guaranteeing state-owned CFE 54 per cent of the market.

• That came as a surprise.
• Also, Europe is seeing rather fast growth in costs.

• First it was droughts and fires and now it is too wet.