The Grumpy Accountant’s Thoughts on the Grumpiness-Inducing Federal Budget

Apr 20, 2021

Finally, after two years without a budget, we have one! Congratulations Canada. Every year during both the First and Second World Wars the federal government of Canada released an annual budget detailing its revenues and expenditures. But for the past two years, the government failed to release a budget. Finally, on April 19, 2021, the federal government released a budget for the fiscal year 2020-21.

The document is 724 pages long and I painfully, somehow, read through it so you don’t have to. The budget contains the word “inclusive” 53 times, “diverse” 58 times and “gender” 757 times.

The Beautiful Letter from the Minister of Finance

The first section of the 724 document is the 13 page foreword written by the Minister of Finance Chrystia Freeland. Here are a few highlights with my comments.

“This budget is about finishing the fight against COVID. It’s about healing the economic wounds left by the COVID recession.”

This is not accurate. COVID did not cause a recession or economic wounds. It was the government’s disastrous response to COVID (lockdowns) which caused a recession and economic wounds.

“It is a budget focused on middle class Canadians and on pulling more Canadians up into the middle class.”

Never in the 724 pages of the budget is “middle class” defined.

“First, we need to conquer COVID… enforcing our quarantine rules at the border and within the country.”

Excuse me? On the day the budget is released, daily flights are entering the country from all over the world, including India, where a dangerous variant is present. Meanwhile, the UK has banned all flights from India.

“When this global pandemic hit Canada over a year ago, our government made a covenant with Canadians.”

What? I don’t remember any such covenant at all. What in the world is she talking about?

“We are delivering today on our promise to increase Old Age Security for Canadians aged 75 and older, which will provide up to $766 more for eligible seniors in the first year, and that will grow with indexation.”

The federal government was criticized earlier in 2020 when it paid out automatic tax-free top ups of Old Age Security as the vast majority of senior citizens have not experienced any loss of income due to COVID-lockdowns since they are typically on fixed incomes.

Many seniors who received the money reported that they simply did not need the funds and experts agreed it was unnecessary. I think this too is a ridiculous unnecessary increase and the entire Old Age Security system, along with GST credits, Canada Child Benefits and the Guaranteed Income Supplement needs to be massively reformed[1].

“…This is why we must begin to rebuild our national capacity in bio-manufacturing and vaccine development and production”

Maybe if the Liberals, for the past five years, had not chased the pharmaceutical industry out of Canada, we would actually have domestic manufacturing and a more robust pharmaceutical industry within Canada.

“Canada has brilliant scientists and entrepreneurs” 

Well, we would have a lot more if we had more competitive individual income tax rates. Ontario has a top tax rate of 53.4% which kicks in at $216,000 of individual income. Compare that to any American state that does not have a state income tax and you can see why the “brain drain” is real.

The top US federal tax rate is 37% and that kicks in at $500,000 of income (USD).  The best and brightest often leave for Florida, Nevada, and other places and the tax rates are a big factor. I have had several clients and friends discuss with me the option of moving from the GTA to Florida and I know every accountant has the same experience. Of course, we don’t see any broad base lowering of individual income tax rates in this budget.

“When COVID-19 first hit, it pushed our country into its deepest recession since the Great Depression. But this is an economic shock of a very particular kind. We are not suffering because of endogenous flaws or imbalances within our economy. Rather, the COVID recession is driven by an entirely external event – much like the economic devastation of a flood, blizzard, wildfire or other natural disaster.”

This is just completely false. What pushed our country into its deepest recession was not COVID-19 but the government’s response to COVID-19. The COVID recession is NOT driven by a natural disaster, like a flood, blizzard, or wildfire. The recession is driven by the government’s conscious decision to order massive and widespread business closures. It was the government’s action which caused this recession by using lockdowns which have caused so much harm and devastation to physical health, mental health, and the economy.

Therefore, the government’s response should be to allow everything to open. Instead, the Minister of Finance is going to spend another $100 billion to help with the “recovery”. There is just NO need for this increased spending. Simply end the lockdowns, allow businesses to safely operate and there should be no need to spend another $100 billion. The C.D. Howe Institute and other economists have argued exactly that.

“The truth is that the tragedy of COVID-19 has created a window of opportunity”

Yes, never let a crisis go to waste. Covid-19 is an opportunity! Hey, everyone, lockdowns, deaths, pandemic… it’s all a great opportunity! This is a shameful statement and you can read it for yourself on Page 19 of the federal budget. The Minister of Finance and the Prime Minister should be ashamed that this made it into the budget and they should immediately apologize.

“We propose to invest $4 billion in a game-changing new effort that will help up to 160,000 small and medium-sized businesses buy the new technologies they need to grow. The new Canada Digital Adoption Program will also provide these businesses with the advice and help they need… by training 28,000 young Canadians – a Canadian technology corps – and sending them out to work with our small and medium sized businesses.”

Am I reading that right? A federal government Canadian technology corps? 28,000 people? Where are they getting these ideas from? $4 billion divided by 28,000 = $142,857. Does that mean they will spend $142,857 to train each of the 28,000 young Canadians in this “technology corps”?

“This groundbreaking new program will help Canadian small businesses become more efficient… and become more competitive in Canada and abroad.”

You know what would help Canadian small businesses become more efficient and more competitive? If the government did not create so many new convoluted, complicated, inefficient programs that small businesses will have to apply for, wasting precious time and resources.

 “Building a net zero economy is no longer a matter of debate. It is about leaving a healthy planet, with clean water and clean air, for our children and their children.”

What? Everything should be up for debate. If we cannot debate certain key issues, then we all lose. Conflating the issues of carbon emissions with clean water and clean air is a common tactic but the truth is one can be in favour of lowering the amounts of pollution, being environmentally friendly and having clean water and air without disastrous new and ever-increasing “carbon taxes”. Canada accounts for less than 2% of global carbon emissions. I don’t see China, Russia, India, and other large polluters calling for “net-zero” carbon emissions. I don’t see China, Russia, India, and other large polluters enacting disastrous new carbon taxes on their populations, punishing their citizens for heating their homes in the winter. 

Home Sweet Home

“A long-term plan for a faster-growing Canadian economy must include housing that is plentiful and affordable for working Canadians, especially young families. So, we propose to invest $2.5 billion and reallocate $1.3 billion in existing funding in order to help build, repair or support 35,000 housing units. And we will support the conversion to affordable housing of the empty office space that has appeared in our downtowns, by reallocating $300 million from the Rental Construction Financing Initiative. Making housing affordable for all Canadians will require significant investments. That is why, on January 1st, 2022, our government will introduce Canada’s first national tax on vacant property owned by non-residents.”

This is perhaps the best example of how ridiculous our government is. The government wants to help families to be able to afford housing. But government policy in Canada is what causes housing to be so expensive.

The Bank of Canada has kept interest rates artificially low for nearly two decades causing speculation, massive debt binges, encouraging Canadians to take on massive mortgages, and causing investors to use equity in homes and real estate the own to put down payments on new properties.

In addition, we have record high levels of immigration into Canada. Canada has one of the highest rates of immigration per capita in the Western world. I think immigration is great but these people need homes to live in but the supply of new homes never meets the constantly increasing demand. This is due to onerous rules at the local, regional, provincial and federal levels regarding restrictions on land use. There are simply not enough homes to house everyone who wants a house.

If the government truly wanted to help with the cost of housing, it would stop guaranteeing our mortgages through the CMHC, the Bank of Canada would let interest rates fluctuate according to market dictates, and provincial, regional and local governments would allow more housing to be built where people want to live.


And now onto the actual budget, Page 27 says:

“Canada entered 2020 in the midst of a sustained period of economic expansion.”

Oh, really? Then why was your government running budget deficits every year since 2016, even pre-covid? When the economy is expanding, the government must run budget surpluses in order to save up funds for when the economy contracts. This is classical Keynes economics. But today, governments only listen to one half of the Keynes equation. They run deficits in the bad times, as Keynes suggested, and they run deficits in the good times, which go directly against his theory. Today, it’s deficits in the bad times and deficits in the good times. As Oprah would say, “you get a deficit, you get a deficit, you all get a deficit!”

After nearly 20 pages on GDP, unemployment rates, economic modelling, and other such fun stuff, on page 46, we finally learn that the deficit for the 2020-21 fiscal year will be $354.2 billion. It is estimated to be $154.7 billion in 2021-22, and eventually decrease to a deficit of $30.7 billion in 2025-26.

Are these deficits affordable?

According to which tracks Canada’s governmental debt, we are already at $1.1 trillion of federal debt alone. That does not even include provincial debt. Each Canadian owes $29,623.01 and the debt grows $1 billion every single day! Every hour, the federal debt grows by $43.5 million. Yes, you read that right. Every single hour that passes by the federal government borrows $43.5 million on your behalf. This is completely insane. I hope voters wake up before it’s too late.

Thankfully, on page 53, the budget does state:

“The government is committed to unwinding COVID-related deficits and reducing the federal debt as a share of the economy over the medium-term.” 

I wish this would say over the short-term but it’s better than nothing. The government is proposing to maintain a fiscal anchor of keeping the debt-to-GDP ratio of just under 50%.  This is definitely better than nothing but still very risky considering this does not include provincial debt and we will be in huge significant massive trouble should interest rates rise.


“Budget 2021 proposes to provide up to $375 million to Global Affairs Canada to support Canada’s international COVID-19 response, with a focus on addressing the health needs of developing countries.”

At this point, shouldn’t Canada be receiving foreign aid to help with our massive debt levels instead of borrowing money to give to developing nations? Why can’t the banks just donate the money themselves to these developing countries? Why do Canadian taxpayers have to foot the bill?


From page 99:

“The high cost of child care—in some urban centres fees for one child can be as much as rent or mortgage payments—is a tax on a segment of the population that Canada requires to drive economic growth. Young families are juggling sky high housing costs, the increasing cost of living, expected to save up for their retirements, while managing child care fees.”

If child care is expensive, why is that? Is it perhaps because of a lack of supply child care spaces? If there is a lack of supply, why don’t we address that and ensure the supply of spaces increases? Is it because too much government regulation, licensing and control of the industry is causing there to be less spaces? Maybe the cost of child care would come down if these issues were addressed.

Furthermore, the cost of child care varies greatly across the country. In Winnipeg the median fee is $451 per month and in Toronto the median fee is $1,578 per month. Why would bureaucrats in Ottawa try to design a program to fix a problem that varies from city to city? This should be left to municipalities, not-for-profits and local communal organizations to come up with innovative solutions. A top-down inefficient bureaucratic federal government program will not work and will turn out to be a big blunder.

Canadian families already receive a very generous tax-free benefit known as the “Canada Child Benefit”. Pre-covid, this amounted to an annual transfer of $25 billion from the federal government and billions more from the provinces to parents. The reason for the Canada Child Benefit in the first place was because the government did not provide a universal taxpayer funded day care program. The idea was to simply give parents the money and let them make the choice of how to spend it. So now we have the Canada Child Benefit and we will also have a new government funded day care program. This is completely insane and ridiculous. Pick one or the other (or neither?).

Ironically, the budget says:

“The very best example of the economic power of an affordable, well-run early learning and child care system is Quebec.”

If that’s the case, then why is the federal government trying to design a national child care program? If Quebec’s child care system is so great, perhaps that’s because is being designed, run and funded on the provincial level.

Leave it to each province to decide what’s best for them! Provincial and local governments are better equipped to design programs for their citizens. Local solutions are better than a made-in-Ottawa solution that surely will turn into a bureaucratic nightmare.

Furthermore, Quebec’s government receives billions in equalization payments every year that most other provinces are not privileged enough to receive and therefore has more funding, courtesy of non-Quebecers to help fund its generous day care program.

In Quebec, let’s remember that their day care system is actually income tested. The higher income a family earns, the more they have to pay for the subsidized day-care. It seems that the federal government’s program is NOT income-tested and therefore will simply be helping high income families who do not need any help.

Page 101:

“The government will also ensure that families in Canada are no longer burdened by high child care costs—with the goal of bringing fees for regulated child care down to $10 per day on average within the next five years. By the end of 2022, the government is aiming to achieve a 50 per cent reduction in average fees for regulated early learning and child care to make it more affordable for families. These targets would apply everywhere outside of Quebec, where prices are already affordable through its well-established system. To support this vision, Budget 2021 proposes new investments totaling up to $30 billion over the next 5 years, and $8.3 billion ongoing for Early Learning and Child Care and Indigenous Early Learning and Child Care, as outlined below.”

WHAT? I’m willing to bet that they will not be able to achieve this goal. The details are murky and the plan relies on cooperation with all the provinces.

They plan to spend $8.3 billion per year, after five years from now, on this program. That’s in addition to the $25 billion per year already being spent on Canada Child Benefits.

At a certain point, Canadians need to realize that their tax bills are going to increase dramatically to pay for all of this. Everyone thinks it’s someone else’s tax bill that will go up, but eventually, the tax increase will hit everyone

This is a bad idea and should be scrapped in its entirety! These types of programs should be left up to the provinces completely. Isn’t education already under provincial jurisdiction? Every province, every city, every community has different circumstances, different needs, and different costs of living and costs of services. The federal government in Ottawa should not be trying to implement a national universal daycare strategy. Let the provinces do this, if each province wants to. There are already municipal subsidies for day care for lower income families in many cities and the Canada Child Benefit is already too generous and full of flaws[2].


What would a Liberal budget be without a section on diversity?

Page 106:

“Budget 2021 proposes a public consultation on measures that would adapt and apply the Canada Business Corporations Act diversity requirements to federally regulated financial institutions. This objective is to promote greater gender, racial, ethnic, and Indigenous diversity among senior ranks of the financial sector and ensure more Canadians have access to these opportunities. Details on the consultation will be announced in the near future. In addition, Budget 2021 proposes that Crown corporations will be required to implement gender and diversity reporting, starting in 2022.”

The federal government wants all federally regulated financial institutions to ensure the senior ranks of the financial sector are diverse in terms of gender, racial, ethnic lines. The details will be announced in the future, of course. All crown corporations must report on gender and diversity as well starting in 2022. Isn’t this wonderful?

Canadian banks and crown corporations have nothing better to worry about than the gender, race and ethnic identify of their senior ranks. Honestly, who cares? Is it so much to ask to hire the best, most qualified person for each job regardless of any immutable characteristics such as race, gender, ethnicity, sexual orientation etc.? Wouldn’t Canada be more productive, more successful, and more competitive if we didn’t waste time on focusing on a person’s race or sex in the hiring process?

I co-own and co-manage an accounting firm. When my partner and I need to hire someone, we look at one thing and one thing only. Is the person qualified for the job? That’s it! We don’t care about anything else. We don’t care whether the job applicant is a man or a woman. We don’t care whether they are white or black. We don’t care whether they are gay or straight or anything else. We don’t care what religion they are, we don’t care what their political views are, we just don’t care. We just want someone qualified for the job.

I wish Canadian companies, and the Canadian government would end this obsession with this ridiculous focus on diversity once and for all. Hire the best people for the job, end of story. Stop spending money, resources, time and energy on forcing companies and government departments to focus on this nonsense and do not implement new bureaucratic inefficient time-sucking “reporting requirements” for diversity!

Along these lines of obsession with diversity, there is a section on page 136 of “Supporting Women Entrepreneurs” and page 137 “Supporting Black Entrepreneurs”. If you are a white male entrepreneur, sorry, there is no specific support for you based on your skin colour.

In fact, the government will choose which businesses to choose to purchase from based on race as per page 138:

“To increase diversity in procurement, economically empower historically disadvantaged businesses…. And contribute to a more inclusive economy: Budget 2021 proposes to provide Public Services and Procurement Canada $87.4 million over five years to – implement a programed focused on procuring from Black-owned businesses.”

What?? So the government is going to choose which businesses they will purchase from based on the race of the owner of that business. How is this not discriminatory?

This is one of the most divisive things that our government is doing.

Dr. Martin Luther King Jr. stated, “I have a dream that my four little children will one day live in a nation where they will not be judged by the colour of their skin but by the content of their character.”

People should not be judged by the colour of their skin yet our federal government is doing just that. This is an insult to every single Canadian entrepreneur, regardless of their race, that has been forced to shut down their business since March 2020, forced into bankruptcy, forced to live off of government handouts, and seen their dreams and life savings disappear as a result of government shutdowns. The government should not be offering funding to one group of Canadians simply based on the colour of their skin, period.

Inter-provincial trade

I am pleased to say that the budget document does discuss the issue of removing inter-provincial trade barriers:

Page 140:

“Removing barriers to trade between provinces and territories will help build a more prosperous economy.”

This is the first statement in the entire document that I agree with. They propose to work with provinces to enhance the Canadian Free Trade Agreement to accelerate the reduction of trade barriers within Canada. This shouldn’t be so complicated and would greatly enhance Canadian economic growth and create new markets and opportunities for small and medium sized businesses across the country.

Climate Change

Page 159 to 192 is all about climate change. Out of respect for the environment, I decided not to use more electricity than needed to write this essay so I will leave out any comments on this section to save electricity.

Arts, Events, and Festivals

The government is going to spend $1 billion over three years to support major festivals, community festivals and events, help visitors discover Canada, support local tourism, local youth sports, arts, heritage, exhibits, entertainment and recreation industries. Arts, community events, musicians, and music venues will receive support as well.

Is this really the role for our federal government? To fund festivals and other events? Isn’t that more of a municipal jurisdiction kind of thing? I really don’t know if I can continue reading this 724 page document. I’m on page 204 at this point.

If people want to have festivals and events in their cities, why can’t they fund it themselves? When did Canadians become so reliant on government funding for everything? Nobody wants to pay for anything themselves anymore. This is a societal sickness that is now reflected in our politics. Politicians know that people don’t want to pay for anything directly so they promise it will be “free” and “universal” and is an “investment” for “middle-class” Canadians.

But someone has to pay the bill. If people want festivals and events, let every attendee of the festival and event pay $5 and to attend the event at point of use. It’s not the job of Ottawa to confiscate the earnings of hard working Canadians to spend millions of dollars on “festivals and events”. If people want to fund musicians, artists, local supports, then fund it locally! Donate money, solicit donors, start a charity or not-for-profit. Why is it the role of the federal government in Ottawa to micro-manage our lives and fund every possible thing that needs funding? No wonder the federal debt is growing by $45 million per hour!

Canadians have become like children and the government has become like the parents who can’t say no. We want everything and we don’t want to pay for it. We expect the government to pay for everything. The philosophy now, of this government, is that anything that is good for society must be free and universal. Anything that is bad must be prohibited and made illegal. No one should have to pay for anything directly anymore. The government can’t say no and Canadians go along with this because they like free stuff. Eventually we will no longer have to pay for groceries or clothing. Our tax rates will increase to 100% and a box of food will be dropped off at your house once a week and a box of clothing will be dropped off once a year. After all, food and clothing are a human right, so they will now be fully funded by the government in the form of a universal grocery and universal clothing plan. We already do this with health care, education and now day care, so why not everything?

Government funding of the media

The government will continue funding the CBC, Telefilm Canada and engage in other wasteful government spending to continue funding the media. I already wrote an article about this which you can read if you don’t mind becoming grumpier.

Helping Charities

The government will spend nearly a billion dollars on helping charities, not-for-profits and other organizations. You know, if the government truly wanted to help this sector, it would scale back its level of taxation of individual income and then people would have more funds to donate.


The government will spend $22.6 million over four years doing an assessment of our national infrastructure. Wait, didn’t this same government already have some sort of infrastructure bank that was supposed to spend and attract billions of dollars? What ever happened to that? You can read about that here.

More on Racism

Page 227 maintains that we have too much systemic racism and we need to do something about it.

Page 228:

“Budget 2021 proposes to provide $11 million over two years to expand the Canadian Race Relations Foundation. This would allow… to scale up efforts to empower racialized Canadians and help community groups combat racism in all its forms.”

What does that mean exactly? I don’t know.

Page 231

“Budget 2021 proposes amendments to the Public Service Employment Act to affirm the importance of a diverse and inclusive workforce and avoid biases and barriers in hiring.”

What does that mean exactly? Will they prefer certain people based on race, gender, ethnicity, sexual orientation in their hiring? If so, wouldn’t that create barriers to people who don’t meet their diversity criteria? Wouldn’t that be the definition of bias in hiring? How do they not see the internal contradiction?

Bureaucracy’s Thirst for Data

Page 230:

“Budget 2021 proposes to provide $172 million over five years to Statistics Canada to implement a Disaggregated Data Action Plan that will fill data and knowledge gaps. This funding will… enhance statistics on diverse populations and support the government’s and society’s efforts to address systemic racism, gender gaps….”

Concluding Thoughts

This was a George Costanza budget. It does the opposite of what it should be doing. It proposes way too much new unnecessary government spending, it proposes way too many new administratively complex inefficient bureaucratic programs, it interferes with provincial jurisdiction, and it is based on a philosophy of government knows best and government can and should do anything and everything.

The fact that the budget document itself was 724 pages is telling. In 2019, the last budget was 464 pages. The 2018 budget was 369 pages and 2017 was 280!

According to the projections in this budget on Page 328, in the year 2025-26 the total annual interest on the debt will reach $39.3 billion, total federal spending will reach $426 billion, and the total federal debt will be $2 trillion.

In 2015, total federal spending was $280 billion. This is a 50% increase in spending over 10 years, which is an average rate of increase of 5% per year. It doesn’t seem so outrageous; however the economy has not been growing at an average rate of 5% per year and therein lays the problem. Government spending is growing at a much faster rate than that of the economy, and we therefore have perpetual never-ending deficits.

I sincerely hope this budget does not pass and an election is called. I would then hope during the election campaign that a viable opposition party would come out with the exact opposite plan that we find in this budget. I would hope this opposition party realizes that Canada has two choices.

One choice is this Liberal budget of big government, more bureaucracy, more inefficient wasteful spending, never-ending deficits, and a strange obsessive focus on gender and race.

The other choice would be to decrease the size and scope of the federal government, get the federal government out of the way, stop interfering in provincial matters, transfer tax points back to provinces so they have the power to tax and don’t need to beg the federal government for money, simplify and reform the tax system, and stop creating so many new government programs, offices, and departments to micromanage Canadians’ lives.

About the Author

Neal Winokur, CPA, CA

Author of The Grumpy Accountant – available on and

Neal Winokur started his practice in 2013 and his grumpiness has grown ever since. An active blogger, several of his articles have been published in the National Post. Neal feels a moral obligation to speak out against the inherent flaws, unfairness and needless complexities that define Canadian tax.

His dream is for the Canadian tax system to be massively simplified to the point where his job as a tax accountant would no longer exist. His wife won’t be too happy about this, but it’s for the good of the nation.

[1] I discuss such a plan in my book, The Grumpy Accountant.

[2] I discuss this in my book, The Grumpy Accountant.


  1. Deane Hennigar

    Thanks for the great job reviewing this Neal. Such an overdone and misguided plan. Reverse Perestroika.

  2. Ronald Pfaff

    Excellent analysis of the “much anticipated” Liberal budget! Unfortunately most Canadians cannot see nor interpret this “monstrously misdirected document” for what it really is! Namely an election focused, goodies loaded and power grabbing governmental effort to retain power and further bring Canada to the edge!! SHAME ON THE LIBERALS AND SHAME ON THE PARTIES THAT WILL SUPPORT THIS BOON-DOGGLE!!!

  3. Daniel Smittens

    Poignant review. Thanks for your hard work and effort to bring this to light!

  4. RT

    Thanks grumpy accountant. I love your work. Unfortunately most people get their information from the headlines of the Canadian news companies who get partially (or entirely) paid for by the federal government.

  5. Allan George

    The Trudeau government appears to have taken a page out of the money management book used by the Greek government. It received billions of dollars from the EU to modernize and improve its economic infrastructure, which it immediately spent on social programs to buy votes. Now, Greece is broke and foreigners are buying up Greek properties and businesses for ten cents on the dollar. While all these social programs announced by the Canadian federal government are nice and appealing, they should not be financed by deficit budgeting. To do so, will lead Canada to become insolvent like the country of Greece.

  6. Al Leach

    What else can we expect from a substitute drama teacher and a journalist holding the fate of Canadians in their grossly incompetent hands. Shame on Canadians who vote and support these incompetent fools. With your support you are as morally bankrupt of ethics as this so called Liberal Government.

  7. David Green

    Thank you for your views and insights. I find these to be very logical and direct.
    Do you fancy running for P.M.? …..please!
    Keep it up