The federal economic update amounts to a grab bag of band-aids and backsliding that will fail to deliver on the economic transformation it promises.

The band-aids are high-profile measures like the GST credit top-up. At $12 billion over five years, it is the single most expensive item in this economic update. The temporary elimination of the federal gas cut will similarly provide short-term relief to households to the tune of $2.4 billion. Both will be welcomed by consumers, but neither will solve the structural causes of the affordability crisis.

The backsliding is most obvious on climate. In keeping with the fall budget — the worst climate budget since the Harper era — this economic update introduces two new fossil fuel subsidies. First is an expanded tax break for liquefied natural gas facilities. Second is a new loophole in the carbon capture tax credit for enhanced oil recovery. In other words, oil companies can now receive a climate tax credit for pumping more oil using captured carbon.

But the backsliding is even more fundamental in terms of the role of government in the economy.

The big story to come out of this update is the introduction of the $25 billion Canada Strong Fund — what the economic statement calls a sovereign wealth fund designed to “transform” the........

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