Liberals slam the brakes in the face of uncertainty
OTTAWA— The Trudeau government reined in new spending in a wait-andsee budget that touts support for ordinary Canadians but hedged its bets in the face of a still weak global economy and unpredictable fallout from the Trump administration.
Finance Minister Bill Morneau unveiled the Liberals’ second budget Wednesday, billing it as a long-term plan to lead job growth and give Canadians the “confidence and optimism” to “adapt and prosper in the face of change.”
“Our plan is ambitious, but it’s responsible,” Morneau told reporters.
Senior government officials conceded however that the budget is a hold-the-course document. New investments outlined in this budget total only $1.3 billion with big-ticket investments in several areas pushed back for years.
The Liberals boasted the budget included a gender analysis of its measures that highlighted how investments in areas such as child care, caregiver assistance and affordable housing would benefit women.
Still, the budget package got a mixed reception from various stakeholders.
Titled “Building a Strong Middle Class,” the budget is essentially a sequel to last year’s “Growing the Middle Class,” with page after page reminding voters what the government did in its first big-spending, deficit-ballooning budget.
Canada Without Poverty praised investments in affordable housing and child care as key steps to helping reduce poverty. Environmental Defence cheered measures on climate, including new energy efficiency standards for buildings. CARE Canada head Gillian Barth criticized the government for not making new commitments for international assistance. The Canadian Chamber of Commerce urged the Liberals to move faster on competitiveness.
Conservative interim leader Rona Ambrose took aim at tax measures. “This budget grows the size of government. It raises taxes all over the place to find a way to pay for the spending. It even taxes Uber,” she said.
NDP Leader Thomas Mulcair said the budget defers many things, some until 2019, an election year.
“That is a theme that you will see in looking at this budget, that there’s a lot of stalling, a lot of things are being shovelled forward,” Mulcair said.
The spending plan says while several economic indicators such as employment numbers and tax revenues are up, and this year’s deficit will likely be lower than expected — there are risks ahead: oil prices are expected to remain low; Canadian exports may remain flat; and “possible U.S. policy actions affecting trade could restrain exports to the U.S. even further.”
As a result, the Liberals have penciled in a $3-billion contingency fund to draw on if growth falls flat.
Overall, this budget adds new details about how Ottawa will spend some of the $93 billion in new money the Liberals had already set out for infrastructure — $11.2 billion will go to affordable housing over the next 11 years, less than the $12.6 billion over eight years the Federation of Canadian Municipalities says was needed.
Although cities didn’t get the levels of funding they were hoping for social housing, the fact that Ottawa is providing cash is significant, said Edmonton Mayor Don Iveson, chair of the big city mayors’ caucus.
“It should provide some relief to municipalities and some provinces that have been carrying the freight on their own,” Iveson said.
In the name of innovation, Ottawa will renegotiate labour market agreements with provinces to develop more Canadian skilled workers, and will invest in so-called “superclusters” — business-led initiatives to bring together innovators and potential customers to work on research and development, and pursue commercial opportunities for creative new products or services.
“We know there’s more we need to do” to better protect Canadian intellectual property and to support Canadian talent coming out of universities, Morneau said. Other budget highlights include: $7 billion over the next decade to create up to 40,000 new daycare spaces, part of the social infrastructure funding announced last year.
$11.2 billion earmarked for affordable housing, infrastructure cash that had been set aside last year.
$691 million over five years for a employment insurance (EI) benefit of up to 15 weeks for caregivers.
The budget offers no new money for the RCMP, CSIS or border services to deal with border security beyond a $143-million package already announced.
There is no new funding either for a military stretched to the limit and under pressure from the U.S. to increase its defence spending. With files from Alex Boutilier