Canadian Prime Minister Justin Trudeau won a historic third term with the promise of higher taxes, bigger deficits and more government spending -- a direction that brings angst to the country’s fiscally conservative business leaders.

“If you believe that big government is a good thing then you’re dancing in the streets right now,” said David Rosenberg, an economist who runs his own research firm after years with major investment banks and money managers on Wall Street and in Canada’s financial center. “If you have a semblance of free market capitalism then you’ve been put into the penalty box.”

Trudeau’s governing Liberal Party has shown little interest in curtailing spending after emergency programs rolled out through the COVID-19 pandemic swelled the federal deficit to a projected $331.9 billion (US$259 billion) this year. Trudeau promised about $78 billion in new spending in his election platform to fund an expansion of social programs. Even Trudeau’s main Conservative Party challenger, Erin O’Toole, promised $51 billion in new spending.

“All the parties were just scrambling to buy Canadian votes,” Rosenberg, the economist behind Toronto-based firm Rosenberg Research & Associates Inc., said Tuesday in a phone interview. “That’s what this election was all about: How much more money can we spend?”

Canada’s business community has generally supported the emergency assistance Trudeau rolled out during the pandemic, though a shift to continue such spending is drawing less enthusiasm among the country’s business groups. The Liberals are returning to power with a minority government and pledges to pursue policies that include supporting affordable childcare, financing home construction and strengthening employment insurance.

“There is an overall growing unease with the level of spending that we see coming, because so many of our members understand that someone has to pay for that at the end of the day,” Corinne Pohlmann, a senior vice president at the Canadian Federation of Independent Business, said in a phone interview from Ottawa.

Trudeau’s Liberals have pledged to shrink the deficit to pre-pandemic levels in the coming years, though they haven’t outlined a schedule for a return to balanced budgets.

“I’m not sure whether there is a plan to deal with the debt at this point,” said Perrin Beatty, head of the Canadian Chamber of Commerce, which represents 200,000 businesses across the country. “I don’t believe you can spend your way to prosperity with money you don’t have.”

The Liberals say record-low interest rates mean that now is the time for the government to borrow and pursue ambitious policies. The government said it expects higher economic growth will keep pace of any increase in national debt. But, according to Rosenberg, that situation comes with its own issues.

“Escalating government debt and rampant deficits crowd out private investment,” Rosenberg said. “When push comes to shove, what is the root of productivity growth? I’ll tell you what it’s not, it’s not government spending. It’s private investment.”