Federal budget proposals focus on health care spending

The Commons finance committee released a prebudget report Tuesday with 145 recommendations, many of which focus on expanding health care, but opposition parties say it fails to explain how Ottawa can afford billions in additional spending.

The report also calls for new conditions on some of the government’s emergency business-support programs to ensure that wage subsidies are not used for executive bonuses or dividends.

On health care, the committee recommends increased spending on a mental-health COVID-19 recovery plan, long-term care and a national pharmacare program. There is also a proposal for the budget to include an additional $2-billion toward global vaccine research.

Other recommendations include a call to “create a nationalized child-care system or increase funding for child care” and to consider a universal basic income.

The report is the culmination of the committee’s annual effort to hear from groups and individuals about budget priorities. It does not attempt to calculate the total cost of the 145 recommendations. For this report, the committee heard directly from 52 witnesses and received nearly 800 written submissions.

Because the Liberals are in a minority position on the committee, each recommendation would have been supported by at least two parties. However, the decisions were reached by MPs behind closed doors and the report does not say how each party voted on each recommendation.

The opposition Conservatives and Bloc Québécois both issued dissenting reports, while the NDP released a “supplementary” report.

The Conservatives and NDP both criticized the fact that the main report does not outline a plan for paying for the recommendations. The Conservative report says Ottawa should live within its means, shouldn’t approve new permanent spending programs and should plan to balance the budget within 10 years.

Conservative Leader Erin O’Toole said the Liberal government should focus on job creation in all sectors of the economy.

“It’s been two years since there’s been a budget from this government. They seem to have no concern about job losses and the debt that’s being piled up. I think Canadians are worried about the future, post-COVID, under this Liberal government,” he said Tuesday at a news conference.

In contrast, the NDP says the government should be approving tax increases – such as a wealth tax and efforts to curb the use of offshore tax havens – so that it can afford new spending in areas such as pharmacare and universal child care.

“I question the sincerity,” NDP MP Peter Julian said of the Liberal promises for major new social programs. “The revenue side has to be taken care of.”

Liberal MP and committee member Julie Dzerowicz said the government has already pledged to address tax loopholes that benefit the wealthy and to ensure that emergency spending is short term.

“We’re really looking to restart the economy, so jobs and economic growth was on the forefront of my mind when we were discussing the recommendations,” she said.

Some of the finance committee’s other recommendations include $7-billion to municipalities for the Rapid Housing Initiative and approval of Via Rail’s plan for a new dedicated passenger rail line between Quebec City and Toronto, called High Frequency Rail.

Finance Minister Chrystia Freeland’s November economic statement said the federal deficit could approach $400-billion this fiscal year. The committee report did not make any firm recommendations related to the deficit, other than to say that the government will ultimately need to keep federal finances “on a sustainable path.”

The economic statement also said the government would spend between $70-billion and $100-billion over the coming three years on stimulus measures.

Also on Tuesday, the International Monetary Fund released its latest statement on Canada’s fiscal approach. The global financial body was broadly supportive of Ottawa’s economic plan through the pandemic. However, it cautioned that the government needs to be clearer on its longer-term debt plans and ensure any new spending is warranted.

“While the government still has some fiscal space, the additional [stimulus] spending, if deemed unjustified, could weaken the credibility of the fiscal framework,” the IMF said. “Commitment to a well-thought-through debt anchor supported by a well-understood operational rule, or the regular publication of longer-term fiscal projections that clearly illustrate fiscal sustainability, would go a long way toward ensuring that credibility in the fiscal framework is maintained over the medium term.”

Ms. Freeland said in a statement that the IMF’s comments show that the federal government took the right approach during the pandemic.

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