Give it props: the Justin Trudeau government has been world-class in spending our money.
But it was long past time Thursday to be world-class in raising some.
The federal budget did nothing of the sort. The document presented by Finance Minister Chrystia Freeland was long on a list of expenditures, short on anything that might generate revenue to foot the bills for them.
It was, instead, another chapter in deepening the influence of the public sector and the intervention into pockets of the economy better left to the private sector.
It ducks any tax reform.
It benefits from an economic bounce-back of commodity prices and corporate performance as the pandemic eases to make the deficit seem less unpalatable.
It assumes labour productivity will just organically arrive with the existing framework, even if few others believe this.
And on a matter near and dear to the hearts and bank accounts of British Columbians, it professes to provide solutions to housing unaffordability that will signal virtuous intention but make no dent into prices now nor supply housing stock soon.
Allocating $475 million for a one-time $500 cheque to “those facing housing affordability challenges” is about as crass as vote-buying can get, but will also have no discernable affect on the market.
“The extraordinary debts we incurred to keep Canadians safe and solvent must be paid down,” Freeland said.
Quite correct. But our spending and deficit tracks would be most optimally and sustainably addressed by encouraging growth, not by riding a resurgence.
Indeed, the $56 billion in new spending stands to compound the 30-year-high inflation that the Liberals never anticipated and whose persistence it continues to deny. It is admittedly less lavish than expected, particularly given the new pact the Liberals have with the NDP, but it’s hardly a grapefruit diet. The Liberals did the minimum necessary to keep the NDP from claiming abrogation of the deal, extending their housing spending and only slightly hinting of a dental care plan.
There is just what we need: another agency, $1 billion over five years for the Canadian Innovation and Investment Agency, with details to come later, along with “a review to further ways to build innovative companies.” How this fits into the existing superclusters and the infrastructure bank is anyone’s guess.
Of course, that one is peanuts compared with the $15 billion Canada Growth Fund announced in the budget. The government asserts that green investments need to exceed $125 billion annually, a fivefold increase. Pre-budget this was not on a lot of wish lists.
The message to foreign capital is a little inconsistent, to say the least: bring your money here to invest in a business, just don’t buy a house. There is a two-year ban on non-resident purchases on principal residences – something that is hardly driving prices and hardly needs attention but was an election pledge. About the only saving grace is that it won’t be difficult to circumvent.
What the government could have done with the budget is to tackle the largest lesson of the pandemic: that our health-care system is strapped and inefficient. A reform of health-care financing would have demonstrated that the Liberals had listened to the public, was prepared to prepare us for the next pandemic and would use this window to make changes before we lose attention on this national priority. On this, the Liberals chose the path of least resistance and wrote another cheque for increased provincial transfers to paper over the problems.
There is, of course, another priority we cannot avoid: the Russian invasion of Ukraine and how it reminds us of an ill-resourced defence establishment. Freeland’s strongest language in the budget was from her authentic experience with both countries, but there was not sizable money to back the language. There are plenty of ideas on how to address Canada’s defence deficiencies now, but the government chose Thursday to launch into yet another protracted review of our capabilities. This is presumably to deal with a conflict sometime in the 2040s. Our allies will not feel more supported today with $8 billion in new spending over five years, spending that draws us little nearer the NATO standard.
The pandemic has given Canadians an opportunity to question how they live, work and think and to have new conversations to set stronger paths. This was the time, with at long last reduced fears of the coronavirus, to roll out a budget of ideas to take advantage of the opportunity to spur productivity – a concept even Freeland refers to as our “Achilles heel.” Instead, she punted. •
Kirk LaPointe is publisher and editor-in-chief of BIV and vice-president, editorial, of Glacier Media.