George Campbell – mtwx.ca
Kim Moody, a financial analyst writing in the Financial Post, called this week’s budget exactly what it is: “Calling the out-of-control spending a generational investment is like calling a payday loan a wealth strategy.”
He’s right. But here’s what he didn’t say: why government keeps choosing the payday loan.
Twenty years ago, a government forester told me about decisions that destroyed an industry. Not one meeting. A pattern of choices—each one optimizing for what was politically convenient instead of economically smart.
The industry never recovered. Communities emptied out. Generational wealth erased.
The people who made those decisions? Retired with full pensions.
This week’s $78 billion budget follows the same pattern. And a significant chunk of it? Bailing out industries that bet everything on one customer and lost.
Here’s what nobody wants to say out loud: Government doesn’t bail out industries because it’s good economics. It bails them out because it’s good politics.
The Lumber Industry’s Risky Bet
For decades, Canada’s lumber industry optimized for one market: the United States.
Not because it was smart. Because it was easier.
Easier to concentrate investment in producing dimensional lumber for North American building codes than to develop products for global markets. Easier to build mills optimized for 2x4s and standard framing lumber than to invest in engineered wood products or mass timber. Easier to take the short-term profit than to build long-term capacity.
Then the US market shifted. Tariffs. Trade disputes. Demand changes. The softwood lumber agreements collapsed and reappeared. The market that represented 70% of Canadian lumber exports became uncertain overnight.
And what happened? The industry that bet everything on one customer came asking for taxpayer money to fix their mistake.
Government said yes.
Why? Because 40,000 lumber workers are 40,000 votes in swing ridings. Because bailing out a concentrated industry in specific regions is politically efficient.
Not economically efficient. Politically efficient.
The Auto Industry’s Similar Mistake
Same story, different industry.
Canadian auto manufacturing bet on being a cheap labor alternative to US plants. Not on innovation. Not on building better products. On being slightly cheaper than Detroit.
When that advantage disappeared—when labor costs equalized and automation made location less important—the industry came asking for billions in subsidies.
Then Trump’s tariffs hit. The same tariffs the industry should have seen coming. The same risk they should have diversified against. Instead, they doubled down on the US market and came asking for more taxpayer money when it blew up.
Government said yes.
Why? Because auto plants employ thousands in concentrated ridings. Because saving jobs in Windsor and Oshawa gets headlines and wins votes.
Meanwhile, the small manufacturer in rural Alberta who makes innovative equipment? No bailout. Too scattered. Not enough votes per dollar spent.
The Pattern You Need to See
This isn’t about lumber or auto specifically. This is about how government makes decisions.
Government optimizes for votes per dollar spent, not value per dollar spent.
A bailout for a concentrated industry = maximum votes for minimum dollars.
Regulatory reform that helps everyone = invisible politically, no concentrated voting bloc to thank you.
That’s why $78 billion in deficit spending includes:
- Billions for industries that failed to diversify
- Billions in “productivity” subsidies for politically connected sectors
- Billions in regional development funds for swing ridings
And almost nothing for:
- Small businesses scattered across the country
- Innovative startups without lobbyists
- Reducing regulations that strangle everyone
Because helping everyone equally doesn’t win specific ridings. Bailing out concentrated industries does.
The Hidden Cost: Why Bailouts Never Work
Here’s what makes this worse:
Part of that $78 billion is just administration costs.
To distribute the bailout money, government needs:
- Bureaucrats to design programs
- Bureaucrats to process applications
- Bureaucrats to monitor compliance
- Bureaucrats to audit results
And companies need:
- Consultants to navigate the application process
- Lawyers to interpret requirements
- Staff time to complete paperwork
- Ongoing reporting to maintain eligibility
Estimate: For every $10 of bailout money that reaches a company, $2-3 gets consumed in administration.
But it gets worse.
When government bails out industries that failed to diversify, it removes the incentive to make smart bets.
Why would lumber diversify markets if they know government will bail them out when the US market fails?
Why would auto invest in innovation if they know government will subsidize them to keep existing plants running?
Why would any industry make hard choices if taxpayers will cover their mistakes?
The answer: They won’t.
This is the payday loan cycle Moody warned about: borrow to fix a problem, create worse incentives, borrow more next time.
What About Innovation?
You know what doesn’t get $78 billion?
Innovation.
The small software company in Saskatoon building agricultural tech? No bailout program.
The manufacturing startup in New Brunswick developing new materials? No subsidy.
The entrepreneur in BC who figured out how to process lithium domestically? No government support program designed specifically for them.
Why? Because they’re scattered. Because they don’t have 40,000 workers in three swing ridings. Because they don’t have lobbyists in Ottawa.
Because government doesn’t optimize for innovation. It optimizes for votes.
And innovation is politically invisible until it’s too late—until the company has already moved to Texas or been bought by a US competitor.
📬 What to Submit to the Blueprint:
“Stop bailing out industries that failed to diversify. Get government out of picking winners and losers. Remove the regulations that strangle innovation. Let capital flow to what works.”
Email: george@mtwx.ca
The Payday Loan Disguised as Strategy
Kim Moody called this budget “a payday loan disguised as a wealth strategy.”
That’s exactly what these bailouts are.
Government borrows $78 billion (the payday loan). Gives it to industries that bet everything on one customer (not a wealth strategy). Claims credit for “investing in Canada’s future” (the disguise).
But payday loans come due.
And when this one does—through higher taxes, reduced services, or both—it won’t be the industries that failed to diversify who pay it back.
It’ll be you. Your kids. Your grandkids.
The Real Question
Here’s what this budget should force us to ask:
Why is government IN the economy at all?
Not “how should government support industry?” but “should government be supporting industry?”
Because every time government picks winners, it’s really picking losers—the companies that don’t get the bailout, the industries that don’t have the political connections, the innovations that die waiting for government support that never comes.
Every dollar spent bailing out concentrated one-customer bets is a dollar not spent:
- Removing regulations that strangle small business
- Reducing taxes that punish productivity
- Getting out of the way so capital flows to what actually works
And every bailout sends the same message: bet everything on one customer, optimize for politics, don’t worry about consequences—taxpayers will cover your mistakes.
What This Budget Proves
$78 billion in deficit spending.
How much goes to bailing out industries that bet on the US market and lost? We don’t know—they don’t break it down that way.
How much goes to administration costs? We don’t know—that’s buried across departments.
How much goes to innovation and small business? Almost nothing—they’re politically invisible.
But we do know this:
Pay attention to where the money goes. Not what they call it—”productivity enhancement” or “regional development” or “strategic investment.”
Follow the votes.
Which industries get bailouts? The ones with concentrated workers in swing ridings.
Which innovations get ignored? The ones scattered across non-competitive ridings.
Which businesses get strangled? The ones too small to have lobbyists.
That’s your money. Being redistributed based on their political math, not economic sense.
They didn’t earn it. You did. They’re not investing it wisely. They’re spending it where it buys the most votes.
Your Move
Because the alternative—the one we’re living in—is a $78 billion budget that rewards concentrated bets, punishes innovation, and optimizes for votes instead of value.
And taxpayers like you pay for all of it.
Wednesday, I’ll show you exactly what that costs—with real numbers, real families, and the arithmetic that proves Kim Moody was right: this budget provides “generational burdens disguised as investments.”
Submit your Blueprint priority: george@mtwx.ca
Join the movement: mtwx.ca/join