A top economist’s budget read-ahead

THE LEDE

Looming large over Doug Ford’s post-election budget is Donald Trump.

That is: Spooked by cross-border trade turbulence — and riding high from a rare cold-weather election that doubled as a verdict on the governing Tories’ economic stewardship, Peter Bethlenfalvy’s Thursday blueprint will be all about economic triage.

It’ll be part construction plan, part economic shield. Already, the government has teased a “build more, build faster” budget, while Ford hinted at “a few more billion dollars” to blunt a blow from the trade war. “There’s a time to make sure that we balance, and there’s a time that it might be a few billion dollars more to protect communities,” he said.

Insiders say the budget will stay on-brand. “I think what we’ve seen from the government so far is a focus on growth. That’s why they’ve been cutting back on interprovincial trade barriers. It’s why they’re streamlining some of the province’s most cumbersome regulatory processes,” one said. 

“I expect the budget will build on that either with necessary tax measures, or more measures to increase competition.”

Still, how much red ink Ford is willing to tolerate? Can the province climb back to black? We expect the budget to push the path to balance further down the road — but how far? Is this the moment for belt-tightening or big spending? 

To weigh in on what to expect, we enlisted Brian Lewis, the province’s ex-top economist-turned-senior fellow at the Munk School. 

Here are the highlights of our conversation:

What are you looking for in next week’s budget?

“I’ll be looking for a few things next week. I’ll be interested to see if there’s more to be said about the government’s response to the global trade war. The government has done some things — some useful things, right? They’ve given businesses more time to pay their taxes. They’ve introduced a manufacturing tax credit. There could be more in the budget, so I’d be interested to see what that would be.