Budget delays the Liberal social justice agenda

Bill Morneau set the tone for the budget a few days ago when he told an interviewer, “We should be focused on how people feel.”

With that in mind, the governing federal Liberals presented their second-consecutive progressive budget. It keeps faith with the social justice agenda that propelled the Grits to power in October 2015. The budget is focused on jobs. Finance Minister Morneau’s budget is designed to boost creation of high-skill, high-paying jobs. It targets six sectors for high-tech growth: advanced manufacturing, agri-food, clean technology, digital industries, health and biosciences, and clean resources.

That initiative is going to require increasing internship and co-op program opportunities that provide a mix of classroom and workplace experience.

There’s urgency to that challenge. Canada suffers shortages of computer savants; engineers; researchers in science, medicine and other fields; and pioneers in the environ- mental technologies that will largely define the 21st century.

The tech sector alone, already hobbled by a paucity of skilled workers, warns of a shortage of 220,000 tech workers by 2020, just three years away. The shortages work against developing Canadian tech prowess, as employers in the fastmoving tech sector are forced to open branches abroad to tap talent, or relocate from Canada altogether.

The budget also proposes to increase venture-capital support for entrepreneurial startups. But for now, Morneau is silent on his interest in increasing the number of small-business incubators and accelerators. Incubators, like Toronto’s MaRS, nurture promising startups that usually are based on an innovation. Accelerators speed the process of commercializing innovations and developing a market for them.

Morneau also took a pass on detailing the Grits’ previously announced “Infrastructure Bank.” Ottawa has said it wants to leverage every dollar it puts in its infrastructure bank into $4 of investment, the balance kicked in by private-sector investors. The government thus hopes to fund $140 billion in infrastructure projects with an upfront Ottawa investment of just $35 billion.

The catch here is that only infrastructure projects with revenue streams will attract private investment. To be sure, that includes a lot of infrastructure, including toll roads and bridges; alternativeenergy suppliers that reap revenues from power consumers; and water and transit systems that earn back their cost of capital through mill rates and Metropasses.

That’s a model that doesn’t work for parks, children’s playgrounds and seniors’ recreation centres. Morneau’s gambit is that heavy private-sector investment in the big-ticket infrastructure just mentioned will free up government funds for amenities that don’t produce revenue.

The Grits have left themselves open to criticism on several fronts with this budget.

Targeting certain sectors for growth will invite disdain from those with memories of government’s many failures at “picking winners.” It’s fair to say that the chronically state-subsidized Bombardier Inc. has never emerged from its half-century-old government incubator.

Judging from this budget, the Trudeau government doesn’t share the sense of urgency cities feel about the country’s lack of affordable housing. Of the $11.2 billion the budget allocates to affordable housing, only $3 billion will be spent between now and 2022.

That’s one of the clearest signs that the Liberals feel they have left themselves overly vulnerable to attack over deficits that are running much higher than the Grits promised in the 2015 election campaign.

Morneau benefited from some tailwinds in preparing his second budget. His first budget can be credited in part for that.

GDP is forecast to grow 2.1 per cent this year, up from 0.9 per cent when the Grits took office. The deficit projection in Morneau’s budget, at $23 billion, is about 8 per cent lower than the latest government forecast. And even without a substantial recovery in the world oil price, job creation, exports and retail, wholesale and manufacturing sales have all outperformed expectations.

Yet this budget is something of a placeholder. It locks in the substantive improvements to “social infrastructure” in Morneau’s first budget, in stark contrast with the weakening of social supports in the U.S. administration’s budget released this month.

Today’s budget mostly holds the line, bereft of the bold initiatives in last year’s budget.

Any further major advances in the Grits’ social justice agenda will have to wait until the next budget, one that sets the stage for the Grits’ re-election bid in 2019.

That could be a historic budget that broadens Medicare to include denticare and pharmacare; introduces a universal basic income and provides more substantial tuition assistance than offered in this budget.

Many of those features are commonplace in the countries that scored highest in the most recent World Happiness Report, though they’re unlikely to show up in Canada as soon as next year. But a progressive can dream.

A budget about Canadians’ feelings was Morneau’s nod to the social unrest in Europe and the U.S. that arises from perceived insensitivity of elites to victims of painful economic disruption.

Morneau’s second budget is humanistic.

It is an assertion of Canadian distinctiveness more powerful than any act of foreign policy.