Liberal-NDP deal may be near end

Next week, the federal Liberal government will table its eighth budget since first winning the 2015 election. Might it be its last?

Act One of the current Liberal government started with “sunny ways,” which included reviving high hopes for a post-Stephen Harper progressive agenda.

Act Two ushered in the clouds, with the contraction from majority to minority government in 2019, followed by a global pandemic that thrust the federal government into activist mode — delivering more than $360 billion in cash supports in those early years of COVID-19.

Not incidentally, those supports kept Canada’s economy from cratering and proved Canada can, indeed, reduce child poverty — thanks mainly to the Canada Emergency Benefit Response (CERB), which, unfortunately, has now come to an end.

In Act Two, the Liberals tried to secure another majority in a bid to voters to give them a pandemic mandate in September 2021, but they returned in minority form and have survived due, in large part, to an agreement with the NDP.

The Liberals’ minority position in early 2021 can be credited with the introduction, at long last, of a national $10-a-day child care program, which is being rolled out now.

Unfortunately, $10-a-day means nothing if you don’t have access to child care spaces and a rapid expansion is desperately needed. But you can’t expand spaces without attracting workers to staff those spaces — and they require more adequate wages.

In Act Two, the government also took steps on several other key NDP demands, such as beginning a national dental care program, spending more money to address Canada’s ailing long-term care system, and introducing the Canada Housing Benefit.

But those Act Two clouds continue to gather. There is a housing affordability crisis in most cities across Canada, with a generation of young Canadians who are struggling to find affordable rentals amid record-high inflation. There’s been much talk about pharmacare but the pace is agonizingly slow.

And the Liberals appear to be reaching the end of the road with regards to NDP co-operation. The agreement is technically in place until June 2025, but most of the items are well underway or completed. Finishing everything by June 2023 wouldn’t be impossible.

So the upcoming federal budget might signal the beginning of Act Three: the end of the Liberal-NDP agreement. The Liberals could decide to die on their own sword and use their budget as a rationale to knock on the governor general’s door and seek another election mandate.

They’ve sealed a 10-year healthcare funding deal with the provinces and territories. They’ll likely offer an olive branch to low-income families struggling with high inflation; perhaps by extending the GST top-up past June. And they’ll likely signal a steady-as-she-goes approach to dealing with climate change.

So while there might be a few surprises in this budget, possibly with further details on the national dental care program, no one is getting a shiny pony.

In fact, compared to the previous three years, this budget could smack of austerity, with a focus on reducing the federal deficit.

The question becomes: on whose backs do we square that deficit? The federal government has two options here.

They could do the responsible thing and raise taxes more broadly on corporations that have been rolling in excess profits during this pandemic, just like they’ve already done on the big banks. Or they could turn off the taps on major income supports and new public services.

An austerity budget would make it hard for the NDP to hold their nose and vote for this budget. The Conservatives and Bloc aren’t likely to vote to prop this minority government up either, prompting another election.

Act Three could be the curtain call for this minority federal government.