Most of the headlines from the Liberal budget were about the big dollar expenditures: tens of billions in new spending on child care, corporate welfare handouts (even excluding pandemic-related supports), student debt relief, climate change programs, Indigenous services, and much more. All this spending will reduce economic growth by shifting economic control from the private sector to government.
However, even when the Liberals aren’t spending more of taxpayers’ money, they are introducing other economically harmful policies. The budget includes, among other things, a new $15 per hour minimum wage for federally regulated workers and a commitment to strengthening “labour protection” for workers in the gig economy.
The problem with these sorts of employment regulations is that they discourage hiring by artificially inflating labour costs and restrict the ability of workers and firms to design employment contracts in ways that maximize the total economic value created through employment.