Promising federal budget ignores debt and deficits

The Trudeau Liberals’ latest budget deserves a thumbs-up from Canadians — but a qualified one.

To be sure, the carefully-calibrated spending measures unveiled Tuesday by Finance Minister Bill Morneau are basically sound.

They hold the promise of growing our economy, advancing equality and improving the daily lives of millions of Canadians.

It’s what’s missing from this budget that’s the problem. It neither acknowledges nor deals with the greatest threat to Canada’s long-term economic well-being — the massive deficits to which this government now seems addicted.

And this casts a long shadow over an otherwise bright fiscal agenda. Blessed with higher than expected revenues, the Liberals opted to spend an extra $20.3 billion on policy action over the next five years.

While that sounds like a lot of money, it’s not out of line when set beside Canada’s 2017 gross domestic product of nearly $1.7 trillion.

Besides, much of the spending is wisely targeted. There’s money for scientific research and innovation and to increase the participation of women in the workforce. Increased funding for Indigenous Peoples will advance the necessary cause of reconciliation.

The plan to study a national pharmacare program shows the Liberals continue to search for new ways to meet the needs of Canadians — though many will suspect the government is simply trying to neutralize part of the upcoming New Democratic Party platform.

Critics have savaged this budget for failing to move toward a national child care program. Indeed, the lack of affordable child care expansion is an oversight for a government committed to growing female participation in the workforce.

It does, however, sidestep the issue of how this national program would be paid for, which will defuse some of the criticism from the right that the Liberals remain profligate spenders.

Canada’s economy is, in fact, humming along nicely under the Liberals.

Recent economic growth has been strong, unemployment low and wages rising. The economic plan the Liberals ran on and implemented deserves credit for at least some of this.

So what’s the problem with a shrewd, compassionate budget that acts progressively while holding onto the purse strings?

Let us point to its deficit — $18.1 billion for 2018-19. Canada is 10 years from its last recession, which was one of the worst in its history. Another recession will inevitably come.

Yet the Liberals have no plan to end deficit spending in what are certainly good times. This could leave them and the nation ill-prepared for the next economic downturn.

The federal debt will reach $651.5 billion in 2017-18 and soar to $730.1 billion by 2022-23.

And interest rates are rising, making servicing the debt more costly.

Adding to the uncertainty are the latest American corporate tax cuts and the possible demise of the North American Free Trade Agreement, which could result in jobs and investment locating south of the border.

Today, the Liberals’ Plan A — this week’s budget — looks good. Let’s hope there’s a Plan B if undesirable nightmares become unavoidable realities.

The Liberals have no plan to end deficit spending. This could leave them and the nation ill-prepared for the next economic downturn.