Budget 2017: Cash crunch leaves Liberals with little new spending
Published Wednesday, March 22, 2017 4:29PM EDT Last Updated Wednesday, March 22, 2017 7:26PM EDT
OTTAWA --The federal government is offering almost no new spending in the 2017 budget, a document that brings into focus already announced funding amid an economic crunch.
Total new spending over the next year, in fact, clocks in at only $1.3 billion on a total budget of $304.7 billion, but all of it is money that was already budgeted in previous spending plans.
The spending is projected to ramp up to $8.2 billion in 2021-2022.
Much of the spending reinforces the Liberals’ plan to emphasize policies that help the middle class and those aiming to join it, including health-care funding, more flexibility for parental leave and other family leave, and community infrastructure.
The careful shuffling of cash leaves the Liberals in a slightly better position, with the deficit actually dropping slightly from the projection six months ago in the fall economic update.
But Finance Minister Bill Morneau has re-added a $3 billion contingency to his calculations, increasing the new projected deficit to $28.5 billion. It’s expected to fall through 2021-22 to $18.8 billion, including the $3 billion contingency.
The government ended the 2016-17 fiscal year in better than expected shape, with a $21.8 billion deficit rather than the $25.1 billion projected last fall.
Federal debt as a per cent of GDP clocks in very slightly higher this year than last, at 31.6 per cent.
“We have shown in this budget a very responsible approach,” Morneau told reporters in the budget briefing. “The plan is to continue to be responsible every step along the way.”
“We see it as a very ambitious plan, a vision of Canada for the future.”
Money for transit, social housing
Much of the spending detailed in the budget, the Liberal government’s second, simply provides the details for broad categories of already-announced spending, including some of the government’s planned $20 billion in social infrastructure funds.
As expected, Prime Minister Justin Trudeau’s government is committing money for skills, innovation and jobs, with $594 million set aside for this year, rising to $1.4 billion by 2021-22.
The most expensive items include infrastructure and social programs, including $20.1 billion promised over 11 years for public transit.
The government also plans to devote $6 billion over 10 years for home care and $5 billion over 10 years for mental health initiatives through individual deals with the provinces and territories.
On assistance for families, a big ticket item is affordable child care, with a $7 billion pledge over 10 years to create up to 40,000 more spaces.
The budget follows through on promise to let parents take their Employment Insurance parental leave benefits over 18 months rather than 12, giving them the choice of taking the existing 55 per cent benefit rate over a year or 33 per cent over a year and a half. They also propose letting women start their maternity leaves 12 weeks before their due dates rather than eight weeks prior.
The government also promises $691.3 million over five years for a new EI caregiving benefit, which would allow Canadians to take up to 15 weeks to care for an adult family member who needs significant support to recover from a critical illness or injury.
The Liberals plan to spend $11.2 billion over 11 years on social housing, including $5 billion for a National Housing Fund to address critical housing issues and targeted support for Indigenous Canadians living off-reserve. The money is also intended to help seniors, those with disabilities and mental illness, veterans and people fleeing domestic violence.
The housing funding also includes $3.2B for new construction, renovations and rent subsidies, and $2.1 billion to fight homelessness.
The country’s mayors had estimated they need more than $12 billion for repairs to existing units alone, in addition to funds for programming and the need to build additional units.
Money for skills training
The budget also includes more than $3.5 billion over five years for education and skills training, including expanded student loan and grant eligibility, in particular for part-time students and those with dependents, and for the youth employment strategy.
Some of the spending is directed to Indigenous Canadians, including $4 billion over 10 years for housing, water treatment, health facilities and other community infrastructure. That money is coming from the government’s previously promised green infrastructure and social infrastructure funds.
There’s also a $90 million increase over two years for post-secondary student support for Indigenous Canadians, which is expected to help 4,600 students; $50 million for skills training, coming out of new, existing and reallocated funds; $55.5 million over five years for restorative justice and $62.5 million over five years for rehabilitation and job assistance for Indigenous offenders.
Other measures included in the budget:
- $624 million over six years for veterans' education and training, mental health and resources
- $62.9 million over five years for immigration and refugee legal aid services
- $100.9 million over five years to fund a national strategy to fight gender-based violence
- $3.6 million over three years to create an LGBTQ2 secretariat at the Privy Council Office to advance human rights
- $55 million over five years to create new and fill 28 new federally appointed judge positions to speed up access to justice
- $27.5 million over five years for an employment strategy for newcomers
- $867.3 million over three years for Via Rail
- $25 million over five years for high-performance athletes
Morneau also promised to closing tax loopholes and devote $523.9 million over five years to prevent tax evasion and improve compliance. The budget forecasts the government will make an additional $2.5 billion over five years from those measures.
Ambrose accuses Liberals of ‘nickel and diming’ taxpayers
Interim Conservative leader Rona Ambrose said the “big spending” budget offered little or no financial relief to Canadians.
“I feel like they’re nickel-and-diming people to death to try and find money for these other things they want to do,” she told CTV’s Don Martin and Joyce Napier.
Ambrose said the average Canadian would be paying the price.
“If you’re a guy that takes the bus and likes to have a beer at the end of the day, your transit pass just got more expensive beer just got more expensive.”
NDP Leader Tom Mulcair, on the other hand, criticized the Liberal government for slashing funding to the low carbon economy fund, which supports provincial and territorial actions to curb greenhouse gas emissions to help achieve national targets.
The budget cuts the fund by $750 million for 2017-2018 and another $500 million the following year.
“That’s inexcusable and that’s putting an environmental debt on the backs of future generations on top of the huge economic debt that they’re leaving and the huge social debt,” Mulcair said.
When asked what else the NDP would have done differently with the budget, Mulcair said the Liberals missed a chance to go after tax havens for corporations and fulfill their campaign promises to help veterans.