Budget 2022 – Continued disappointment
Last month, I highlighted results from my pre-budget survey on the fiscal direction constituents wanted to see in federal Budget 2022. The key takeaway was a low spending, decreased taxes, debt reduction plan that would curb escalating inflation. However, quite the opposite was introduced with a 2022-23 projected deficit of $52.8 billion.
Canada’s finance minister suggested the budget was “prudent.” Media reported it as restrained, noting the deficit was half of the previous year. In actuality, outside of the unmatched two-year pandemic spending of 2020-21, this budget is among the highest since Confederation. It contains lots of promises, (often regurgitated from previous budgets), with little detail and obvious disregard for what is needed for Canada’s economic recovery.
Small business, for example, asked government to prioritize red tape reduction and tackle inflation to ensure the cost of doing business does not continue to increase. The Liberals failed to adequately address either.
This budget also missed an opportunity to showcase agriculture’s potential, as it reannounced spending previously outlined in the government’s 2030 Emissions Reduction Plan, while reinforcing what the Parliamentary Budget Officer had already confirmed — a rising carbon tax to $170/tonne — will have almost no effect in reducing emissions in the agriculture sector. Instead, by 2030 it will take over $1.1 billion from farm families, which could be used to upgrade machinery and adopt more sustainable practices.
Premiers asked for an additional $28 billion in Canada Health Transfers to address pertinent provincial health needs. This was ignored in favour of $5.3 billion over five years and $1.7 billion ongoing to provide dental care to lowincome families.
Provinces didn’t ask for expanded dental coverage, which is part of healthcare and under their jurisdiction. If they had, the federal government should increase transfer payments rather than creating a new federal program which undervalues existing health plans.
With increased global conflict, and despite an additional $8 billion in defence spending over the next five years, there is no specific plan associated with the investment in the Canadian Armed Forces (CAF) to ensure there is actual follow through on any line item. With a shortfall of 10,000 soldiers in CAF, coupled with the need to make serious investments in new equipment like F-35 fighter jets, polar icebreakers, and submarines, this budget is inadequate to meet Canada’s needs to defend ourselves in an increasingly unsafe world.
The environmental component of the budget contains lots of money attached to unrealistic outcomes, but its biggest failure is blocking a critical decarbonization strategy for Canada’s oil and gas sector. By banning Enhanced Oil Recovery (EOR), from the carbon capture tax credit, because it results in some oil production from the bottom of the wells, the government has allowed ideology to interfere with real action and solutions for climate change.
During Parliament’s Easter break, Liberal cabinet ministers crisscrossed the country promoting and trying to defend their budget. From my perspective, it must have been a difficult scam convincing Canadians who are left wondering when this government will finally stop wasting hardearned taxpayer dollars and get serious about implementing an economic recovery plan.