Investments over balance
FEDS CHOOSE INVESTMENTS OVER RETURN TO BALANCE IN NEW BUDGET
The Trudeau government tabled a budget Tuesday that will use billions of dollars worth of fresh fiscal runway for new investments, a decision that leaves Ottawa with no timetable for balanced books anywhere on its horizon.
Finance Minister Bill Morneau’s budget will channel the extra dollars into new spending that he’s banking on to lift Canada’s longterm growth.
In releasing his third fiscal plan, Morneau sought to reassure Canadians the new commitments would be carried out in a responsible way, while arguing his earlier investments had already produced encouraging economic results.
“The economy is doing well — remarkably well,” Morneau said in prepared remarks of his budget speech.
“With a strong and growing economy in place, we believe that now is the right time to focus on the deeper challenges that hold our economy — and our people — back.”
Compared to the fall, the government says it has $19.8 billion in additional cash to play with over the next six years — an average of $3.3 billion a year in extra fiscal elbow room.
That money was generated by a number of sources, including the stronger economy, revenues from tax changes for private corporations, lower-than-expected departmental spending and nearly $5 billion in re-profiled infrastructure commitments over the next two years alone.
But due to the new investments, the government will continue posting annual deficits at roughly the same pace.
Morneau’s plan to raise longterm growth is counting on waves of new measures designed to advance fundamental science, nurture the innovative economy and topple many of the barriers preventing women from fully participating in the workforce.
Indeed, one of the predominant themes of the budget is to bring more women into the workforce, which many say will bring big economic benefits.
But it remains to be seen whether the additional investments will be enough to give future generations the economic boost the Liberals have promised.
Some say Ottawa has spent too much, because the government may have to eventually address another economic downturn or potential fallout from the trade and competitiveness uncertainty connected to the United States.
Others argue Morneau should be spending far more if he truly wants to increase growth. For example, some said the budget’s lack of a comprehensive child-care plan means Ottawa hasn’t gone far enough to ensure the economy reaps the benefits of higher female participation in the workforce.